Download According to the majority of analysts, Estonia`s current potential

REVIEW OF BALTIC STATES REAL ESTATE MARKET 2002
According to the majority of analysts, Estonia’s current potential annual economic
growth is 5–6%. Despite weak external demand, GDP increased by 5.8% in 2002.
Both domestic demand and higher private sector borrowing activity sustained the
growth. Together with single large investments (in Estonian context) this delivered
more than a 4-percentage-point growth difference with the Euro area and large
variance in growth rates by quarters.
Although the economic growth was accompanied by current account deficit exceeding
12% of GDP, Estonia and its economy were increasingly credible due to the
integration into the European Union and NATO. This was sustained also by the 1.2%
government surplus and inflation rate drop to 3.6% ª. Estonia’s high reputation is also
reflected in country ratings assigned by leading rating agencies in the world.
The annualised EU economic environment was the worst of the recent years for
Estonia. The weighted average growth rate of the economy of Estonia’s main trading
partners remained almost on the level of 2001 and was still substantially faster than
the EU indicator.
ª In December 2002 against December 2001
Source Bank of Estonia