According to the base scenario of Eesti Pank's 2008 autumn forecast, Estonia's gross domestic product will decline by 1.8% in 2008 and by 2.1% in 2009. So far the economic correction has been more abrupt than expected primarily due to decreasing domestic demand. In addition to the cessation of the rapid real estate market expansion, also private consumption dropped in spring more than forecasted. This has been induced by increasing uncertainty, higher interest rates, and declining borrowing. At the same time, in the past year and a half, external development factors have become less favourable from the point of view of Estonia's future development. This has been conditioned by the weakening demand in export markets, the rise in the price of commodities, and growing global money market interest rates due to the financial crisis. More...