Economic outlook, analysis and forecasts

Estonia - Economic forecast summary (June 2016)


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Economic growth is projected to strengthen gradually, boosted by private consumption. Exports and investment will gain some momentum in 2017 as economic activity strengthens in European trading partners. Shortages of skilled labour will push up wages and raise consumer price inflation somewhat.

The government’s fiscal stance is slightly expansionary, but public debt is very low. Reducing the structural surplus further would be appropriate to fund increased growth-enhancing spending, including for education and infrastructure. Aligning energy tax rates across different energy sources more closely and raising them according to their CO2 content would help improve energy efficiency, which is lower than in most OECD countries.

Labour productivity declined in 2015 and is expected to recover only gradually. Improving collaboration in applied research between domestic and foreign institutions, strengthening infrastructure, in particular by expanding access to European transport networks, and shortening corporate insolvency procedures would accelerate productivity growth. Strengthening vocational training would boost the productivity of low-wage workers, thereby making growth more inclusive.


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