Analysts expect unemployment in Estonia to continue declining this year similarly to the fourth quarter of 2012 but at a slower pace.
Estonian analysts expect unemployment to decline further in 2013
14th February 2013, 15:16
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The unemployment rate decreased in the fourth quarter slightly more than expected but the economy too grew at a slightly faster rate, SEB Pank analyst Ruta Arumae said. Employment increased last year 3 percent compared to 7 percent in the previous year, that is, more or less matching the pace of economic growth.
"The decrease in the rate of unemployment has not yet slowed markedly but that's what we expect to see in the year ahead," Arumae said, observing that the annual growth in the number of employed persons was in the fourth quarter even slightly higher than in the previous quarter.
The analyst noted that in the fourth quarter employment grew the most in transport, information and communications, the sectors that drove economic growth. In manufacturing however the number of employees was significantly reduced for the third consecutive quarter, dropping by 8.2 percent. The reason for this is declining demand on export markets, she said.
Chief economist at Nordea Pank Tonu Palm said that the overall decline in unemployment last year was in line with expectations and predicted that joblessness will decrease by about one percentage point in 2013.
In a situation of continued unemployment growth in the euro zone, joblessness in Estonia remains below 10 percent, he noted. Germany was the other euro zone country that saw a drop in unemployment.
"The fact that people have found work is good in itself, but it were even better if there were signs of employment growth in the first place in the open sector and in better-paid jobs," Palm said but added that significant structural change is not in sight.
In his words, employment growth is largely due to sectors expanding on account of domestic demand, whereas in manufacturing employment decreased by nearly 9 percent and in energy and water supply by 29 percent in the fourth quarter.
The unemployment rate was 10.2 percent in 2012 and 9.3 percent in the final quarter of last year, Statistics Estonia reported on Thursday. Unemployment decreased compared to the previous year and to the fourth quarter of the previous year. In the fourth quarter the employment rate of the population aged 15–74 was 61 percent, 0.9 percentage points lower than in the third quarter but 1.3 percentage points higher than in the fourth quarter of 2011.