Estonian Economy and Monetary Policy 3/2020

The spread of the coronavirus from the start of the year had a major impact on the performance of the Estonian economy and of the economy of the whole world. Although the economic decline in many countries was less than was forecast at the first peak of the crisis, the economy of the euro area still contracted by almost 12%, which is the largest drop in the history of the single currency area. The drop was softened by assistance measures taken by governments, and after the restrictions were eased there has been a partial recovery that has been very different in different sectors. The continuing uncertainty in the outlook overshadows the recovery in services particularly, while increases in orders are expected in manufacturing.