Estonia saw the highest economic growth in the EU in 2011 according to a report on Baltic Business News. Citing SEB bank’s Baltic Household Outlook, the article showed how in addition to Estonia’s impressive growth rate (7.6 per cent), neighboring Lithuania (5.9 per cent) and Latvia (5.5 per cent) saw the second and third highest rates respectively.
This rate of growth in Estonia, which exceeded expectations, was largely export-driven, but improvements in domestic demand have also been in evidence.
Naturally the vagaries of the external economic world can and will have their effect on future growth. However another sign of the ever sought after green shoots of recovery is the fact that unemployment has also fallen in Estonia and across the Baltic States. When compared with the low point in 2010, employment in Estonia has risen some 11 per cent. Indeed thesese two developments, economic growth and falling unemployment naturally tend to go hand-in-hand and, again, are largely export-driven.
In Estonia, the construction sector in particular has seen an increase in employment, obviously benefitting the Estonian real estate sector, along with manufacturing, transport and storage. That being said, unemployment is in no way back to pre-crash levels.
Real wages have also seen an increase in the Baltic States over the same period, in particular in Estonia where the last quarter of 2011 saw real wages at 6.3 per cent higher than the corresponding period a year earlier.
As noted previously on our Tallinn Property blog, the residential housing market has been improving over recent months in Tallinn, so these economic indicators are further evidence of this welcome trend.