Analytics, Estonia, Financial Services, Funds, Investments, Pensioners
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Thursday, 28.03.2024, 21:42
Pension funds could invest EUR 1-2 bln in Estonia in coming years
"The tax amendments that entered into force in 2015 have resulted in
an advantageous environment and Estonia's economic environment favors
investments. By today the volume has grown large enough to make direct
investments. We consider it to be realistic that 1-2 billion euros would be
invested in Estonia in five years," chairman of the association Mihkel Oja said in a press release.
According to Oja, today pension funds compete with banks in offering
financing products because alternatives are expensive -- stock exchanges have
risen for a long time and interest rates are low. "An opportunity to
support economic growth is an additional bonus. I forecast that in five years
the volume of pension funds will grow from 3.8 billion to 7 billion
euros," he added.
"In 2017 investments in Estonia increased considerably -- LHV pension
funds made decisions worth 170 million euros, Swedbank's pension funds for 66
million euros. The pension funds of LHV and Swedbank invested in Estonia 110%
of the payments made into them by the state. The format of investments has also
changed -- while previously investments were made through other funds and the
stock exchange, at present and in the future mainly direct investments are
made. In addition, a second pillar pension funds that invests only
in Estonia is being set up," Oja said.
"The more entrepreneurs use mandatory pension fund assets to invest in
Estonia the better. It also supports the growth of Estonia's economic
development as well as competitive ability," Mait Palts, director of the
Chamber of Commerce and Industry, said.
According to Palts, in the fourth quarter of 2017 the investments of
pension fund assets increased considerably -- while in the fourth quarter of
2016 a total of 5.56% of pension fund assets were invested in Estonia, in the
same period last year the share was 9.59%.