The Estonian economy escalated by 9.8% in 2005, according to official figures from the Bank of Estonia (Eesti Pank).

The banks latest quarterly bulletin now forecasts economic growth of 8.1% in 2006, 7.6% in 2007 and 6.9% in 2008.

However, despite this impressive economic growth, the inflation rate is predicted to fall to 3.6% in 2006 and to 3% in 2007.

Darren Goodson, author of How to profit from one of the biggest property booms in Eastern Europe says: "The impressive growth of 9.8% last year will most certainly have a positive impact on the property market in Estonia, especially in Tallinn.

"In terms of FDI, which incidentally more than doubled last year, 82% is actually invested in Tallinn. Also you will find that around 60% of the entire countrys GDP is also produced in the Tallinn area.

"The growing economy means more new businesses and more new jobs, wages in Estonia increased by 12% in 2005.

"Last year, average Estonian property prices rose by 30% and up to 50% in the city centre area. I forecast a 15-20% price increase for 2006 and 20-25% increase during 2007 in the lead up to joining the euro."