Author(s): Baudouin Lamine, European Commission
Volume 7, Issue 6, 14.10.2010
This study focuses on the most important drivers of the swift current account rebalancing which is taking place in Estonia and considers the possible way forward.
After very large deficits in the boom years (2005-2007), Estonia's current account balance turned positive in the downturn, as domestic demand severely contracted. It should shift back into deficit when domestic demand eventually resumes, with a speed and extent dependent on the country's further efforts to increase productivity and competitiveness.
The views expressed in the ECFIN Country Focus are those of the authors only and do not necessarily correspond to those of the Directorate-General for Economic and financial Affairs or the European Commission.