Estonia’s economic growth in 2020 will be negative but the outlook is better than initially feared during the emergency situation in the spring, Governor of the Bank of Estonia Madis Muller said on December 16.
Muller said: “In Estonia, our lives and economy were less affected by the virus and restrictions than European countries on average. The target markets in northern European countries also did better.”
The coming months will be quite difficult due to the second wave of the coronavirus and the subsequent new restrictions, but the economy should be able to recover quickly.
“In summer, we saw how quickly Estonian companies and the economy were able to recover, as the virus receded,” he said, but added not all sectors had been hit with the same force, such as the tourism industry which was still struggling.
The Bank of Estonia’s forecast shows unemployment will rise in the first half of 2021, but is likely to slow down when the vaccine arrives. After that, the economy will start to recover when restrictions are lifted.
“The average salary will not decrease even this year,” Muller said. “The lives of the Estonian people will continue to improve in the coming years and incomes will grow.”
In 2019, Estonia’s GDP growth was 4.9%, GDP volume EUR 28 billion and consumer price index growth 2.3%. Unemployment was at 4.4%.
Last December, before the pandemic, the Bank of Estonia forecast 2020’s GDP growth to be 2.3%. (ERR/Business World Magazine)
