Estonian Economic Growth Upwardly Revised

Estonia's already impressive preliminary growth estimate of 10.5% for the fourth quarter of 2005 was upwardly revised to 11.1%.

This have had the effect of reducing unemployment from 8.9% to 6.2% in the latest year. As a result of the increasingly tight labor market, worker's compensation rose 14.2% in nominal terms, or about 10% in real terms. The Western European politicians and labor unions worried about Eastern European immigrant workers will soon have nothing more to worry about-at least not with regards to Estonians-or Latvians.

For 2005 as a whole, growth was 9.8%. Composition of growth seemed mostly sound, with fixed investments rising from 28.4% of GDP to 29.1%, even as the trade deficit fell. Meanwhile, government consumption fell from 19% to 18.2%, allowing the Estonian government to lower the already relatively low tax rates while maintaining a budget surplus.