Estonian Economy and Monetary Policy 2/2014

The Estonian Economy and Monetary Policy is an Eesti Pank review that contains analysis of the main recent events in the Estonian economy and the forecast for the current calendar year and the next two. The Eesti Pank economic forecast is produced jointly by experts from the central bank’s Economics and Research Department and Financial Stability Department. The Eesti Pank forecast is a part of the joint forecast for the euro area produced by the euro area central banks and the European Central Bank, which uses common assumptions about the external environment. The assumptions about the external environment cover the interest rates in the euro area money markets, the exchange rate of the euro, and commodity prices. The economic forecasts produced at the same time by the other central banks of the euro area are used for the assumptions for demand and prices in Estonia’s trading partners during the forecast horizon. The external environment forecast assumptions are based on information available as at 19.11.2014, and the data on the Estonian economy available as at 14.11.2014. The Eesti Pank forecasts are compiled using EMMA, the macro-model of the Estonian economy developed and regularly updated by Eesti Pank