Ernst & Young Downgrades GDP Growth Forecast to 2%
Accounting consultancy Ernst & Young has lowered its prognosis for Estonia's economic growth this year, predicting a 2 percent rise in GDP.
The figure marks a 0.5 percent drop from what the company had estimated in December.
"After posting the Eurozone’s fastest GDP growth in 2011, at 7.5 percent, the pace of expansion will slow sharply to 2 percent this year as trade partners’ austerity puts the brakes on export demand. The severity of the slowdown will also adversely affect investment in 2012, while high levels of household debt will continue to restrain consumer spending," Ernst & Young said in its spring forecast, released March 15.
However, the company said that the country's medium-term outlook remains positive, with GDP growth expected to come in at 3.8 percent in 2013 before rising to 4.7 percent in the 2014 to 2016 period.
The forecast also predicted that the country would soon shed its high rate of unemployment, reaching a rate of 5 percent by 2016, down considerably from the 10.9 percent predicted for this year's average.
Steve Roman