Estonian Economy and Monetary Policy 9/2006

Monetary Developments & Policy Survey. September 2006

CONTENTS

I ECONOMIC POLICY SUMMARY
ESTONIA
Monetary policy environment
External and domestic demand
General government
Inflation
Projections
MEASURES OF EESTI PANK IMPLEMENTED IN 2006
ADJUSTMENT OF THE TIME-SERIES OF GROSS DOMESTIC PRODUCT AND NATIONAL ACCOUNTS
II ECONOMIC DEVELOPMENTS
EXTERNAL ENVIRONMENT
General Background
United States
Japan
Euro area
Nordic countries
Central and Eastern European Countries
Russia
International financial and commodity markets
ESTONIAN ECONOMY
Domestic Demand
Investment
Private consumption
General government
Domestic supply
Industrial development
Services and other sectors
Employment
External balance
OVERALL TAX BURDEN STABLE DESPITE THE INCOME TAX REFORM
III INFLATION
Consumer price index
Labour costs
Real exchange rate of the kroon
PRICES IN THE ESTONIAN CONSTRUCTION SECTOR CLOSEST TO THE EU-15 AVERAGE
IV MONETARY AND FINANCIAL SECTOR
Liquidity environment and domestic financial markets
Money supply
Non-financial sector borrowing
Capital flows
V ECONOMIC FORECAST FOR 2006-2008
SUMMARY
External enviroment
Economic Growth
Domestic Demand
Private consumption
Investment
Government consumption growth
Labour Market
Inflation
Food, alcohol, and tobacco
Core inflation
Motor Fuel
Energy used by households
External balance and external debt
Financial sector
RISKS TO ECONOMIC GROWTH

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