Banks expect Estonia’s economy to keep growing

Estonia’s major commercial banks expect moderate economic growth to continue, ERR reported. Swedbank forecasts growth of 2.4% this year and in 2028, with growth slowing to 2.2% in 2027.

Swedbank expects inflation to reach 3.4% this year before easing to 3% next year. Chief economist Tõnu Mertsina said this year’s growth had been supported by private consumption, higher government spending and investment. He said growth was likely to slow next year as higher inflation and interest rates could weigh on household spending.

SEB forecasts growth of 2.5% this year, 2.2% next year and 2.7% in 2028. The bank expects inflation of 3% this year and next, falling to 2.5% in 2028. SEB economic analyst Mihkel Nestor said the bank had lowered its outlook for next year, citing inflation and interest rates, particularly across Europe. Estonia’s inflation is slightly below the euro area average, he said.