Banks forecast continued economic growth in Estonia
Major commercial banks operating in Estonia expect the country's economy to continue growing at a moderate pace in the coming years.
Swedbank forecasts Estonia's economy will grow by 2.4 percent this year and next, before easing to 2.2 percent the following year. The bank expects prices to rise by 3.4 percent this year, with inflation slowing to 3 percent next year.
"If we look at this year, growth has been supported largely by private consumption, higher government spending and investment. Next year, growth is expected to slow somewhat, though a little over 2 percent growth is still quite solid for Estonia. In our assessment, slightly higher inflation and higher interest rates will begin to constrain private consumption. We have revised our private consumption forecast downward, and that affects GDP," said Swedbank Chief Economist Tõnu Mertsina.
SEB forecasts economic growth of 2.5 percent this year, 2.2 percent next year and 2.7 percent the year after that. The bank expects inflation to reach 3 percent this year and next, before slowing to 2.5 percent the following year.
"We have been forced to lower our growth forecast for next year somewhat. We now expect growth of 2.2 percent, which is in the same range as this year's 2.5 percent. The main reason for scaling back optimism slightly is what is happening with inflation and interest rates, and not so much in Estonia as across Europe more broadly. In Estonia, inflation remains somewhat below the eurozone average," said SEB economic analyst Mihkel Nestor.
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Editor: Marko Tooming, Argo Ideon
