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Country Report Estonia Product Image

Country Report Estonia

  • ID: 2114012
  • January 2015
  • Region: Estonia
  • 67 Pages
  • The Economist Intelligence Unit

As expected, on January 22nd the European Central Bank (ECB) announced that it would start purchasing sovereign bonds in March 2015. In total, the ECB will purchase assets worth EUR60bn each month; given its other asset purchases, this implies buying around EUR50bn of sovereign bonds a month.

It is a significant achievement for the ECB-and its president, Mario Draghi, in particular-to have exceeded market expectations as to the composition of its programme of sovereign bond purchases. This rests on Mr Draghi's commitment to persist with the programme until inflation expectations have moved back in line with the ECB's target of "close to, but below, 2%". The most likely channel through which this inflation might occur is the euro exchange rate, which edged to a new 11-year low of US$1.146:EUR1 following the announcement.

We have argued from the outset that the impact of ECB sovereign bond purchases on the real economy of the euro zone will be minimal. That remains our view, and it was echoed by two things Mr Draghi said during his press conference following the announcement.

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Country Report Estonia

ECB expands QE, exhorts governments to do more
Event
Analysis
Impact on the forecast

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Note: Product cover images may vary from those shown

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