Estonia: towards a swift current account rebalancing

This study focuses on the most important drivers of the swift current account rebalancing which is taking place in Estonia and considers the possible way forward. After very large deficits in the boom years (2005-2007), Estonia's current account balance turned positive in the downturn, as domestic demand severely contracted. It should shift back into deficit when domestic demand eventually resumes, with a speed and extent dependent on the country's further efforts to increase productivity and competitiveness.