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Analysts forecast rapid economic growth in second quarter of 2017

According to LHV economist Heido Vitsur, Sweden's four-percent economic growth suggests that Estonia's economy will also do well, as its impact on the Estonian economy is very strong and direct.

Analysts forecast that the Estonian economy will see rapid growth in the second quarter of 2017, ERR News reported on Tuesday.

“It is very rare for economies that are so strongly linked to move in different directions,” Vitsur explained. “I don’t think that the second quarter’s growth will definitely exceed the first quarter’s 4.4 percent, but it will likely be good.”

At the same time, Estonia’s quarterly economic growth is difficult to predict, as the country’s economy is small, which means that one-off factors such as the purchase of a vessel by Tallink, may have a very strong impact on growth.

SEB economist Mihkel Nestor also expects economic growth to be strong in the second quarter, but expects it to be on the same level as in the first quarter of 2017. “The industrial sector, which has the biggest impact in value added being created, was able to substantially increase production volumes,” he highlighted, adding that construction and trade are also doing well.

According to information released by Statistics Estonia this week, retail store sales increased five percent on year in June. “At the same time, GDP statistics have been able to surprise analysts in the past few quarters, but we still hope that the positive main scenario will be realized,” Nestor commented.

Nordea economist Tõnu Palm has forecasted Estonia’s second quarter economic growth to total three percent, as the growth speed of exports and investments is expected to slow somewhat. In addition, he expects the economies of Spain, France and Germany to perform well.

“The global economy has enlivened, and export adds extra fuel to the international demand of the economy of the eurozone,” said Palm. “The consumer is the main growth motor. The reason behind it can be found in low interest rates, increasing employment and high economic confidence.”

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