Analytics, Banks, Estonia, Good for Business, Investments

International Internet Magazine. Baltic States news & analytics Monday, 19.11.2018, 12:16

Swedbank: Investments by Estonian businesses to start growing again

BC, Tallinn, 08.11.2018.Print version
Even though investments by Estonian businesses are decreasing this year, they are set to start growing again next year as companies will be investing more than before in increasing efficiency, Tonu Mertsina, chief economist of Swedbank Estonia, said LETA/BNS.

"While investments by businesses will be decreasing this year, this is largely due to the base effect -- in the first half of last year investments grew at an exceptional speed in many areas of activity, such as wood industry and the transport sector. Next year the impact of the base effect will recede and corporate investments are expected to demonstrate moderate growth then," Mertsina said at the presentation of Swedbank Economic Outlook for fall 2018.  


"In the next few years loan interest rates will remain low, which supports investment. It is positive that the structure of corporate investments is increasingly geared towards increasing efficiency," Mertsina said.


He said that where investment in machinery and technology has grown, investments made in buildings have decreased.


"Even through growth in government sector investments is expected to decelerate this year and in the next couple of years, their volume will remain high in a stable manner measured as a ratio to GDP and they will continue to provide a strong stimulus to the economy," Mertsina said.


Investments by the Estonian government sector measured as a ratio to GDP amount to 5.4% this year and are set to remain in the region of 5% in the coming years -- the highest level in the EU.

 






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