Estonia’s new economic forecast expects GDP to drop 8% in 2020

By bne IntelliNews April 2, 2020

Estonia’s economy will contract 8% in 2020 because of the coronavirus (COVID-19) outbreak, the Baltic state’s finance ministry said on April 1.

The ministry thus updated its previous forecast, which said the economy would contract 3% this year.

“The forecast has been updated with the impact of the economic environment and restrictions of movement, but does not include government measures," said Finance Minister Martin Helme said in a statement. 

"The aim of the state is to reduce the economic downturn in the forecast by contributing to the economy in the form of various support measures. We are working to launch the measures as soon as possible,” the minister added.

Estonia has been battling the epidemic since February 26 with close to 800 cases to date, including five deaths. 

Tallinn has prepared a €2bn – equivalent to 7% of GDP – programme to ease the impact of coronavirus on the 1.1mn-strong Eurozone economy.

According to Estonia’s central bank Eesti Pank, GDP will fall 6% this year, while Swedbank predicts a contraction of 5%.

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