TALLINN - According to the fresh economic forecast of Nordea bank, Estonia’s economic growth will be based this year mainly on domestic demand, being 3.2 percent instead of the earlier forecast of 3.5 percent. “Achieving 3 percent is a good figure in the European sense, both in them meaning of domestic and foreign balance,” said Nordea’s chief analyst Tonu Palm. Nordea sees growth this year from developing markets and America. Palm added that Estonia has to be ready for the European recovery to be delayed longer than in the previous economic cycle.
Nordea expects Estonia to have 3.8 percent economic growth in 2014.
SEB bank recently revealed its East European economic report, in which it also forecasts Estonia having 3.8 percent economic growth this year and 3.7 percent next year. In February, the bank forecast Estonia 3.3 percent growth for this and 4 percent growth for the next year.
The bank’s chief economist, Ruta Arumae, said that the factors that contribute to the economic growth are distributed quite equally but if she had to point out one, it would be wages growth that will increase domestic consumption. Aurmae said that the adjustment of wages takes place mostly this year and it is doubtful that it would continue next year.
In addition to the wage growth, the GDP is affected this year by large investments that have been made earlier, the state’s fiscal policy and balanced current account. The main risks for the growth come from problems that may emerge abroad.