Republic of Estonia : 2019 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Republic of Estonia

Author/Editor:

International Monetary Fund. European Dept.

Publication Date:

January 22, 2020

Electronic Access:

Free Download. Use the free Adobe Acrobat Reader to view this PDF file

Summary:

This 2019 Article IV Consultation with Estonia discusses that the outlook is favorable for the near term, however, for slower economic activity for the medium term. Th economy has performed well in recent years, supported by prudent management and effective structural reforms. Growth remains strong and unemployment is at a record low. Inflation is above the euro-area average, consistent with Estonia’s convergence process. Wages are rising, reflecting a tight labor market and skill shortages at the high end of the labor market. Absent reforms to boost productivity and manage demographic challenges, however, growth will slow notably. The authorities need to guard against potential overheating in the near term while taking advantage of sizable fiscal buffers in the medium term to support innovation and labor supply and reduce inequality. The report recommends that it is imperative to consider changes that preserve the pension system’s viability and sustainability, while promoting policies that address inequality. This includes raising female labor participation through broader implementation of gender pay transparency and flexible childcare arrangements.

Series:

Country Report No. 20/12

Subject:

English

Publication Date:

January 22, 2020

ISBN/ISSN:

9781513526881/1934-7685

Stock No:

1ESTEA2020001

Format:

Paper

Pages:

69

Please address any questions about this title to publications@imf.org