Analytics, Economics, Estonia, EU – Baltic States

Marje Josing.

“The fall of prices of fuel and other raw materials on the global market was positive for Estonia. The slowing down of the inflation rate pace during the final months of the year was also positive. It is also good that a more flexible Labour Contract Act that is so necessary for a period of crisis was finally adopted,” she stated.

Josing said that the most negative development in 2008 was the global financial crisis which will affect the entire real economy and will significantly lower the capacity of Estonia’s economy to overcome the decline after the real estate boom.

She added that disappearing investments of regular people from funds and pension funds and the wave of redundancies that started on the second half of the year were also negative. Josing criticised the Government and Riigikogu as well, noting that they were incapable to sufficiently take into account the processes in real economy in the State budget.

“The year 2009 will be difficult for entrepreneurs as well as for all of us. Enterprises will suffer due to low demand on the domestic market as well as in exports countries that are important for Estonia,” Josing noted, adding that due to the shortage of orders, companies are forced to cut back jobs and unemployment rate will increase.

“The good thing is that n the macroeconomic level, Estonia’s competitiveness through this economic crisis will certainly improve as entrepreneurs and the entire public sector are forced to think more on reorganising production and service and efficiency of production processes,” concluded Josing.