The Bank of Estonia said economic growth is predicted to increase slightly, but it will not achieve pre-2008 heights.
Growth in 2015 is likely to match or slightly go above the 2.1-percent recorded in 2014. In 2016 and 2017 that figure is forecast to rise to between 3-4 percent, which, according to the central bank, is Estonia's long-term growth capacity.
“Faster growth is restricted by the decline in population, and by the current structure of production, equipment and production technology, which are more complex and costly to add to than was the case before. Without structural reforms to support growth, it could only exceed 4% temporarily, and probably at the cost of the economy overheating,” the bank said today.
Speaking about export, the Bank of Estonia said Estonia has adapted well with the drop of more than 50 percent in trade with Russia by finding new markets in Sweden and in the Eurozone. The bank said Estonian growth in recent years has been driven by domestic consumption more than anything else.
Click here for a more detailed report on forecasts for the Estonian economy. The report is in English.
Editor: J.M. Laats