Nordea: problems in Spain to indirectly affect Estonia

Tõnu Palm, chief analyst of Nordea Bank in Estonia, says that although Estonia’s trade with South European countries, in particular Spain, is small, worsening of the situation in the region would affect also Estonia.

„Trade with Spain is much smaller than with our main trading partners, but if things worsen, it could force companies to postpone investment decisions,” said Palm.

Nordea said yesterday that it expects the Estonian economy to grow two percent this year.

„The forecasts of our main trading partners have remained relatively good. We see that a two-percent growth this year is realistic and even if the euro crisis deepens, there are still reasons to adjust the forecast somewhat higher,” said Palm.

At the same time the bank decided to lower next year’s economic growth forecast from 4.2 percent to 3.8 percent.
Palm said that the recovery of indebted countries has been slow, but at the same time the confidence of Estonian consumers has been increasing.

According to Palm, the improved consumer confidence is based on economic recovery but it could be short-lived.

Toomas Hõbemägibbnatchararipaev.ee