The economy has adapted to the coronavirus, therefore there’s no reason to be too pessimistic about economic growth, and SEB expects the Estonian economy to grow 3.3 percent in 2021 and 4.5 percent in 2022, Mihkel Nestor, economic analyst at SEB, said on Tuesday.
As recently as in January this year, the bank predicted Estonia’s gross domestic product to grow 3.5 percent in 2022.
Nestor noted in a press release that optimism is also underpinned by the fact that the restrictions in place over the past month and a half have not significantly worsened the situation of the economy.
“Economic growth is guaranteed solely by the fact that the first half of 2020 was more than poor for the economy – it is not difficult to grow from that,” he said.
For the second half of the year, Nestor forecasts a sharp acceleration in growth caused by the lifting of restrictions and money from the second pension pillar that is about to flow into the economy in the autumn. The same factors will boost the economy in 2022.
“Household consumption is the main driver of economic growth. The decline in private consumption to date has been driven not by people’s declining incomes, but by scarce opportunities to spend the money they have earned,” Nestor said. If vaccination proves successful enough and restrictions on travel and entertainment services disappear, Nestor estimates that a large proportion of consumers are willing to spend more than before.
Read more: ERR.EE