European Commission forecasts Estonia 2021 economic growth at 2.6 percent

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Berlaymont Building, headquarters of the European Commission, in Brussels. Source: Andersen Pecorone/wikimedia commons

Estonia's economy will grow by 2.6 percent in 2021, the European Commission has forecast. The figures represent a climb-down from 6.2 percent predicted for 2021 last summer, and also depends on a gradual reduction in coronavirus restrictions.

The commission said last year the economy contracted by 2.9 percent, again a lower figure than forecast in summer 2020, when a decline of 7.7 percent was predicted.

Private consumption and exports have been resilient to the economic effects of the coronavirus crisis, the commission says, while accommodation and catering were the hardest-hit sectors.

For 2022, the European Commission is forecasting growth of 4 percent.

Across the Eurozone, the commission predicts growth of 3.8 percent in 2021 and 2022, while for the EU as a whole the forecast figures are 3.7 percent this year and 3.9 percent in 2022.

Household and private consumption and investment in Estonia itself are seen as a driver in growth and are in relatively good shape, the commission says, while inflation will move into the positive at 1 percent, but go no higher, partly due to a slump in the labor market.

Deflation was experienced at times in 2020, while inflation for the whole year was just 0.6 percent in Estonia, the commission says.

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Editor: Andrew Whyte

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