According to the Swedbank Economic Outlook released on April 6, the bank has left the 2017 GDP growth forecast for Estonia at 2.2%, while unemployment is expected to increase to 7.6% this year.
According to the bank’s forecast, Estonia’s GDP is expected to grow by 2.2% this year and by 2.8% next year. Household consumption is to grow by 3.2% this year and by 3.8% in 2018, while consumer prices are expected to increase by 3.2% and by 2.6% respectively.
According to the economic outlook, the real growth of net wages is to total 3% this year and 8.8% next year.
The export of goods and services is expected to grow by 5.4% this year and by 5.5% next year, while imports are expected to grow by 8.1% and by 5.4% respectively – an increase of 2.6% and 0.7% over its winter forecast figures.
Swedbank forecasts that Estonia’s unemployment rate is to total 7.6% in 2017 and to climb to 7.9% in 2018, an increase of 0.1% and 0.2% respectively over its January forecast.
While the work capacity reform is to reduce the number of non-active people in the near future, it will also increase the number of unemployed people in Estonia.
“The number of vacant positions has constantly increased and the scarcity of labor has become a more and more serious problem,” said Swedbank Estonia’s chief economist Tonu Mertsina in the bank’s press release. “We expect the number of people who are not actively looking for work due to studies, old age, poor health or raising children to decline this year and next year. Labor shortage as well as the rising pension age and the work capacity reform are to affect the decline of non-activeness. The latter will result in the number of unemployed people rising.” (ERR/Business World Magazine)
