Macroeconomic Forecast Estonia

We forecast Estonia's economic growth to come in at 2.7% in 2012 following a 7.6% real GDP growth in 2011. The slowdown in economic expansion that we had expected towards the end of 2011 is already underway with data from Statistics Estonia showing that quarter-on-quarter (q-o-q), real GDP contracted by 8.3%, versus a 4.0% q-o-q expansion in Q411. Our view for a slowdown is predicated on our expectation for weaker export growth, as key export destinations also experience weak growth, and slower consumer spending this year.

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