Manufacturers worried about Estonia’s poor economic growth13.08.2013, 14:56
Commenting Estonia’s second quarter economic growth of only 1.3%, most Estonian entrepreneurs say that they are worried about the future, writes Äripäev.
Even the ever-optimistic Finance Minister Jürgen Ligi admitted that it’s not a rosy picture: “I am somewhat sad, but our expectations are mainly on the second half,” Ligi said.
Also analysts admit that the growth figure is disappointing and hint that it may be time to adjust growth forecasts. Among others, Bloomberg analysts were expecting the Estonian economy to grow 2.6% in the second quarter.
Jüri Käo who is head of the Employers’ Confederation and manages NG Investments which has extensive holdings in Estonian enterprises says that he was not surprised about the figure.
“Estonian economy is very dependent on Europe’s economy as a whole, and the latter is not doing well. I don’t expect the situation to improve in the next two quarters and I would be happy if we could maintain current growth,” said Käo.
He added that one reason was that Finland and Scandinavian economies were doing worse. “These impacts will remain and influence us,” he said, adding that if he were looking for positive news, it is that the German industry was improving although this impact takes a long time to reach Estonia.
Käo said that Estonia’s economy must maintain its focus on exports. “When domestic consumption starts to drive the economic growth, it will end with a bang,” he said, adding that the most important thing is not for the state to increase public spending.
“It’s always the private sector that first senses a crisis, and when the economy starts to grow, it’s always the public sector that is last to sense it,” he said.
Enn Veskimägi, former head of Employers’ Confederation and CEO of furniture manufacturer Standard says that it’s all about Europe.
“We are in this corner and cannot prepare a thicker soup,” said Veskimägi adding that only the IT sector seems to be doing better than all the rest.
As for the manufacturing industry and construction, Veskimägi says that the two sectors are shrinking.
“The only exception is in road building which has given a temporary boost to GDP. We build roads until October and November, so it remains to be seen.”