Swedbank lowers 2016 GDP growth estimate to 1.5%
Swedbank lowered Estonia's economic growth forecast by 0.5% to 1.5% on Monday, while the bank left next year’s forecast unchanged.
In 2016 Estonia's economy is expected to grow by 1.5%, and next year by 2.5%. Next year’s real GDP growth is expected to total 2.7%.
Tõnu Mertsina, Swedbank’s chief economist, said introducing the bank’s new economic outlook that the import demand of Estonia’s trade partners was expected to improve, which in turn would mean more export opportunities for Estonian businesses.
Mertsina also said that interest rates were still low and would favor investment. Wage growth is expected to remain fast over coming years, but a deceleration in Estonian households' purchasing power growth is still slowing down consumption, the report points out.
This year, inflation is expected to be -0.1%, while next year Estonian consumer prices should once again start to grow, and inflation then total some 2.5%. For 2018 inflation is estimated to be about 2%.