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Estonia Country Risk Report Q1 2019

Estonia Country Risk Report Q1 2019

Given the stable domestic political situation and the open business environment, we believe that growth outperformance relative to the rest of the eurozone is highly likely over the coming years Estonia can continue to transition to a higher value added production and services-based growth model

Estonia will remain among the most structurally stable countries across emerging markets, in part due to its very strong fiscal position Having fully converged to all major multilateral European institutions, the country will continue to benefit from a robust policy anchor and a high degree of institutional capacity over the long run

The country's often fractious relationship with neighbouring Russia, undermined by domestic divisions between ethnic Estonian and ethnic Russians, presents the one key risk to stability

Estonia faces a major demographic problem Declining fertility rates, increasing life expectancies and a continuous and extensive emigration have led to an aging and, shrinking population In the long run this will create a host of economic, political and social challenges

Key Risks

Estonia's demographic problem presents the biggest risk to the country's outlook as it weighs on production capacity and firms's competitiveness on foreign markets Besides this, the actions of Russia continue to represent the biggest external threat to Estonia


Executive Summary
Core Views
Key Risks
Country Risk Summary
Economic Risk Index
Political Risk Index
SWOT
Economic – SWOT Analysis
Political – SWOT Analysis
Economic Outlook
Economic Growth Outlook
Government To Moderate Economic Slowdown In Estonia
GDP By Expenditure Outlook
TABLE: PRIVATE CONSUMPTION FORECASTS
TABLE: GOVERNMENT CONSUMPTION FORECASTS
TABLE: FIXED INVESTMENT FORECASTS
TABLE: NET EXPORTS FORECASTS
TABLE: GDP GROWTH FORECASTS
Outlook On External Position
TABLE: CAPITAL & FINANCIAL ACCOUNT BALANCE
TABLE: TOP 5 GOODS IMPORTS IN 2017
TABLE: TOP 5 GOODS EXPORTS IN 2017
Monetary Policy
ECB Has Few Options But To Gradually Tighten
Structural Fiscal Position
TABLE: MAIN REVENUE AND EXPENDITURE CATEGORIES IN 2017
TABLE: FISCAL AND PUBLIC DEBT FORECASTS
Currency Forecast
EUR: Gradual Appreciation Amidst End Of QE
TABLE: EUROZONE CURRENCY FORECAST
10-Year Forecast
The Estonian Economy To 2027
Trend Growth To Average Lower in 2018–2027
TABLE: LONG-TERM MACROECONOMIC FORECASTS
Estonia Country Risk Q1 2019ContentsTHIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS MACRO RESEARCH and is NOT a comment on Fitch Ratings’ Credit Rating. Any comments or data included in the report are solely derived from Fitch Solutions Macro Research and independent sources. Fitch Ratings’ analysts do not share data or information with Fitch Solutions Macro Research.Political Outlook
Domestic Politics
Nationalist Rhetoric To Gain Ground In Estonia's Political Landscape
TABLE: POLITICAL OVERVIEW
Long-Term Political Outlook
Few Risks To Structural Stability
Developed States
TABLE: LABOUR MARKET RISK INDEX
TABLE: LOGISTICS RISK INDEX
TABLE: CRIME AND SECURITY RISK INDEX
TABLE: TRADE AND INVESTMENT RISK INDEX
Global Macro Outlook
Contagion Risks Limited To EMs For Now
TABLE: GLOBAL MACROECONOMIC FORECASTS
TABLE: DEVELOPED STATES, REAL GDP GROWTH, % y-o-y
TABLE: EMERGING MARKETS, REAL GDP GROWTH, % y-o-y
Index Tables
TABLE: ESTONIA – MACROECONOMIC DATA & FORECASTS

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