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OECD Secretary-General addresses how Estonia can become more resilient to external shocks and achieve even stronger, more sustainable and inclusive growth at the official launch of the latest OECD Economic Survey of Estonia.
Estonia has achieved high growth, but boom/bust cycles need to be mitigated by macroprudential and fiscal policies, and the social costs of volatility reduced by investments in skills and innovation, activation and targeted income support.
Estonia recovered forcefully from the global economic crisis but growth has since slowed, highlighting the need for further reforms that reduce exposure to external shocks and ensure against future boom/bust cycles, according to the OECD’s latest Economic Survey of Estonia.
Country Notes from OECD Economic Policy Reforms: Going for growth 2011 presenting OECD recommendations for structural reform priorities for individual countries.
The Estonian fiscal position is much better than in many OECD countries, the country stands out for having a rather lean government sector and the authorities are striving for efficient use of existing resources.
- Economic Survey of Estonia 2011
Estonia has already experienced many benefits of increasing international integration, most obviously in significant convergence.
Estonia is recovering from a deep recession. Main policy challenges are: avoid cyclical unemployment becoming structural; strengthen fiscal framework; address non performing loans; reap efficiency gains in government operations and make more out of globalisation as a sustainable driver of growth
The ongoing financial crisis has put euro adoption at the top of Estonia's policy agenda. However, shocks affecting Estonia are only weakly synchronized with those of the euro area, and the structure of its economy also notably differs from the euro zone.
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Data and supplementary tables from Economics Department working paper on Estonia and euro adoption: Small country challenges of joining EMU.
Estonia is now in a severe recession. To restore high and sustainable growth, the country will need to rebalance its resources from non-tradables towards exports.