Estonian Economy and Monetary Policy 4/2019

The economic circumstances for Estonia in the near term will be defined by the weakness of trading partners and the uncertainty prov-oked by the trade conflict between the US and China. Although central banks around the world have eased their monetary policy, encouraging growth in the economy by doing so, the decline in global trade that started at the end of last year and the consequent tightening of supply chains is hurting the capacity for growth in manufacturing. Indexes of economic activity indicate that problems in the industrial sector are being passed on to the services sector, which has so far been doing better thanks to rapid growth in incomes. The global retreat is reflected in the cooling in the economies of Estonia's main trading partners.