TALLINN, Estonia (AP) – Estonia’s gross domestic product rose 11.5 percent last year, continuing its streak as one of Europe’s fastest growing economies, the government said Tuesday.
In the fourth quarter, GDP surged 11.2 percent, according to preliminary data.
Booming household consumption, cheap loans from mainly foreign-owned banks and soaring real estate prices were the main drivers behind the stellar growth, said Kristjan Pungas, an analyst at the Finance Ministry.
Robust construction, service and wholesale sectors were further contributing to the growth rate, he said, adding that wages and costs were also on the rise.
Pungas warned that the Baltic nation of 1.3 million already was seeing “some signs of overheating.”
Foreign investors are increasingly troubled by rising labor costs and inflation, and some are reportedly considering relocating production to Belarus and Ukraine, where costs are significantly lower.
