Analytics, Economics, Estonia, Markets and Companies

Leev Kuum, the senior analyst at EKI said that we can't sell more than consume, and noted that entrepreneurs should avoid laying off employees carelessly. Business people should also try to find solutions for the problems and not push all the responsibility to the state shoulders.

The economic situation continued to worsen in the first quarter, which was predictable, Kuum said.

"The direct causes of the economic downturn are still small domestic demand and narrowing foreign markets. The downturn in the Estonian economy continues. There are no signs that the situation will improve in next six months," Kuum noted.

According to Kuum, the economic downtrend is not that sharp anymore, but one may certainly say that the bottom has not been reached yet. Some sectors, such as servicing, may improve since this is seasonal.

Lauri Tammiste, the head of the economic analysis department of the Ministry of Economic Affairs of Estonia, forecasted that some companies will disappear and exporters will help the economy back on its feet.

"We see that some companies will disappear, new growth won't come from there," Tammiste said.

He said that more than 95% of export is going to the markets which are experiencing downtrend as well. There are no notable signs of improvement expected next year as well.

"The percentage of Estonian companies is microscopically small. If some foreign market falls by 30%, it doesn't mean that the market share of an Estonian company should fall that much, too," the representative of the Ministry of Foreign Affairs pointed out.

General economic situation deteriorated further in 1th quarter of 2009

Source: ki.ee

General economic situation deteriorated further in first quarter of 2009. Expectations for the next six months improved somewhat and economic climate index rose to 2,3 points (1,9 in December). Experts do not expect a turnaround in economy during the next six months, but there is general consensus that the trade balance improves and inflationary pressure weakens.