Estonia: Euro soon?

Real GDP is set to fall by around 14% this year and by a further 1% in 2010. Although a weak recovery will begin next year, the resumption of growth could be threatened if recovery in major export markets is delayed and will depend largely on success in shifting resources from serving domestic demand, which has collapsed, to expanding export activities.

Economic policy is driven by the desire to maintain the currency board with a view to adopting the euro as soon as possible. Fiscal policy has therefore been strongly pro-cyclical in an effort to ensure qualification for euro-area entry. The new labour law, relaxing employment protection legislation, should facilitate the reallocation of workers to more productive jobs, provided adequate activation measures for the unemployed are implemented.

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©OECD Observer No 274, July 2009

Economic data

GDP growth: -9.8% Q2/Q1 2020 2020
Consumer price inflation: 1.3% Sep 2020 annual
Trade (G20): -17.7% exp, -16.7% imp, Q2/Q1 2020
Unemployment: 7.3% Sep 2020
Last update: 10 Nov 2020

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