Another Correction: OECD Reduces Growth Forecast to 1%

Photo: Postimees/Scanpix
11/19/2013 1:20 PM
Category: Economy

Following a trend, the OECD has now refined its forecast for Estonian GDP growth in 2013 to a more pessimistic 1 percent.

That's down from 1.5 percent in spring and 3.7 percent last autumn.

Commercial lenders and the Ministry of Finance have all been periodically adjusting their estimates downward.

The OECD's figure is the most conservative, while the ministry's September forecast predicted 1.5 percent growth. SEB is forecasting 1.3 percent, and Swedbank, 1.6 percent.

The OECD is calling for 2.4 percent growth next year and 4 percent in 2015.

It said consumer spending and average wage growth coupled with lower unemployment are currently the engines of growth.

Corporate investment and a healthier regional economy should start exerting an influence next year.

The OECD says the labor market is developing in a positive direction, but said demand for workforce qualifications will not meet the supply.

Inflation will remain around 3 percent this and next year, said the OECD.

The OECD said active workforce measures and lifelong learning had to be boosted at the policy level and the tax burden on low-income segments had to be decreased.

Slower recovery abroad and lower than expected growth in Russia, along with emigration from Estonia, were additional risks for Estonia, the organization said.


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