European Commission: Estonia's Recovery Slowed by Rising Uncertainties
European Commission has lowered its economic forecast for Estonia, pointing to the rising geopolitical uncertainties.
GDP growth is now expected to stabilize at around 2 percent in 2015, instead of the 3 percent predicted in spring, but should reach 2.7 in 2016 as external demand gradually recovers.
Unemployment is also expected to continue its decline, as is the dept-to-GDP ratio, which is forecast to fall below 10 percent.
In the first half of 2014 real GDP growth slowed to 1.4 percent from 1.6 in 2013. Domestic demand, supported by strong real income growth, remains the main growth driver, as the global outlook continues to be bleak.
Nominal wage growth is expected to be around 6 percent in 2016, real wage growth around 4 percent.
The minimum wage should increase by 10 percent in 2015 and the unemployment rate decrease in its natural rate, reaching 6.3 percent in 2016.