On the back of a recovery of investment and private consumption values as well as a favorable external environment, the Estonian economy is expected to grow 3.5 percent in 2018, Luminor said in its fresh economic growth forecast.
"While growth this year will be more subdued compared to the economic growth rate of almost five percent last year, it will nevertheless exceed the long-term sustainable rate of growth," Luminor chief economist Tõnu Palm said in a press release.
According to Palm, the deceleration of economic growth will be moderate, as the development of the domestic economy has accelerated, and the outlooks of export markets remain good.
Wage growth is set to slow down from 6.8 percent in 2017 to 6.1 percent in 2018, but will still remain faster than the eurozone average.
The shortage of skilled labor is the primary factor which may begin holding back Estonia's GDP growth in the future, according to Luminor.
Editor: Aili Vahtla