Nordea: Estonia's employment rate to reach new record levels in future
According to Nordea's economic forecast, Estonia achieved positive population growth for the first time since the reestablishment of independence in 1991 and several economic indicators are set to reach new record levels in the future as well.
Modest economic growth mainly supported by domestic consumption has been going hand in hand with a notably good labor market situation and is currently surprising with a positive migration balance, reported Nordea in its fresh economic forecast.
According to Nordea Estonia's Chief Economist Tõnu Palm, it is very likely that in addition to Estonia's population growth being positive for the first time since 1991, several new labor market records are poised to be set soon.
A surprisingly rapid growth in the positive migration balance fully balanced the negative natural population growth and even brought with it a slight increase in population, said Palm. The negative migration balance has been on the decline and the number of births as well as the birth rate on the rise since 2013.
While totaling 6.5 percent overall in Q2, the unemployment rate is set to fall to the lowest level in a long time in Q3.
According to Palm, all signs, including a 6-percent growth in retail sales, point toward strong domestic consumption, which is to gradually slow down due to an increase in prices and the slowing down of employment growth. "A positive surprise was a 5-percent growth in export of goods in Q2," he added.
Exports are to be supported by a low reference base in the future, while a more broad-based modest growth is to occur next year at the earliest, said Palm, adding that a general recovery in exports will take more time.