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economic policy statementEstonian economyeconomic growthinflation

Estonian Economy and Monetary Policy 2023/2

Activity in the global economy has increased since the start of the year, but the outlook for growth remains fragile. Inflation falling slowly has led to further tightening in monetary policy, and growth in the economy is now probably being held back not only by the higher cost of borrowing but
also by the reduction in the fiscal stimuluses that increased during the crises. Growth in the global economy is forecast to be below 3% this year, which is the lowest it has been since the great financial crisis, leaving aside the pandemic. Blockages in supply chains that were earlier causing bottlenecks have by now largely been resolved, but no new wave of growth has yet taken off in global trade. The changed geopolitical circumstances have encouraged companies to shorten their supply chains through nearshoring, which has pushed up inflation for manufactured goods.

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