The bank published two risk scenarios looking at the potential impact of the coronavirus on the Baltic economies, which shows the Estonian economy as being the most vulnerable to the impact of the virus due to the bigger share that export makes up of Estonia's GDP.

The two scenarios said the impact on Estonia's growth rate could range from 0.3 percent to 1.0 percent depending which of the scenarios will materialize.

Additionally, 7.3 percent of the goods imported to Estonia come from China, which is a higher ratio than that of other Baltic countries. 

The negative impact on exports will be more indirect, as the Baltic countries aren't exporting a lot to China. Exports will be affected by lower demand in Scandinavia and elsewhere in the EU though.  

Swedbank said the Estonian economy is considerably more vulnerable than that of neighbors also in the tourism sector, as Estonia is more dependent on tourism than Latvia or Lithuania.

While Chinese tourists make up only about 1 percent of all tourists visiting the Baltic countries, people in many other countries as well will increasingly avoid travel due to the spread of the virus. 

As the third factor, Swedbank named domestic demand, which is likely to weaken across the Baltic countries if negative effects from foreign trade and tourism start undermining employment and wage growth. Also, households affected by the coronavirus scare will start to save more, putting off major purchases and limiting their purchases mostly to basic necessities,

The coronavirus is also seen to affect the prices of various goods and services. Since demand is likely to fall more than supply, the overall price level, especially in services, is rather expected to decline. 

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