Recession To Last Through 2009

We expect Estonia to remain in recession through the remainder of 2008 and 2009, with real GDP growth forecast to come in at -2.6% and -3.1% respectively. Negative growth in private consumption will be the key factor weighing on the economy, though slowing external demand is also expected to add to downside risks. An improvement in 2010 is expected, but this is likely to be mitigated by only limited recovery in credit markets and external demand.

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