Analytics, Economics, Employment, Estonia, Interview

Aavo Heinlo.

"It has effected the business sector as natural selection process: eliminated the weak, stopped the borrowing boom and spending and forced the survivors to be effective and introduce organisational as well as marketing innovations," the expert said.

According to Heinlo, at the beginning of 2010 the downward curves gave way to signs of recovery as exports and industrial production started to grow.

"Innovation, fulfillment of the euro criteria and a hope for an improvement in the global economic situation are like a balm for Estonia's economy," he adds.

Economic recession appeared to be unexpectedly sharp in 2009; therefore, a lot of enterprises had to adapt quickly and decisively to new circumstances.

Another Statistisc Estonia analyst Siim Krusell added that the year 2009 was a complicated one for a lot of households and a tough task for the state and local governments.

"A lot of problems which emerged at the end of 2008 or in 2009 have aggravated this year," he noted.

As an example, he mentioned that unemployment was on a record high level at the beginning of 2010.

"In the first quarter, every fifth economically active working-age person was seeking a job and the labour market indicators look worse now than after the crisis of the end of 1990s," he noted.

Krusell admitted that the high level of unemployment is currently one of the most crucial problems for the country which will have short- and long-term impacts on a lot of spheres in life.

Whether unemployment is growing, has stabilised or even decreased a bit – this will become clear in mid-August when Statistics Estonia is going to release the unemployment indicators for the second quarter.

According to Krusell, the fact that people have evaluated their economic coping in 2009 as worse than a year before is a proof of the gravity of situation. In 2008 people coping with great difficulties accounted for 8% and people coping with some difficulties comprised 32% of the population, but in 2009 the respective indicators were 15% and 36%.

Heinlo and Krusell were speaking last week at the presentation of the publication "Eesti statistika aastaraamat. 2010. Statistical Yearbook of Estonia" which reflects in figures the life of Estonia in the first decade of the 21st century.