In addition to the public sector that has carried out pay increases also the private sector of Estonia apparently has to go on hiking the pay of employees this year, SEB Pank analyst Ruta Arumäe said presenting the bank's fresh economic forecast on Tuesday.
According to the forecast, nominal pay increases are set to reach 7–8 percent in Estonia this year. "If such growth persists, it threatens to generate cost pressures and again undermine competitiveness," it stands in the fresh SEB Nordic Outlook made public on Tuesday.
A large part of that increase comes from increases in the public sector, Arumäe said. "The whole public sector is increasing its wages," the economist said, adding that the rates of increase in the public sector range from 4 to 20 percent. "That a quarter of the employed in Estonia work in the public sector already makes for a rather big input," Arumäe said.
"The private sector definitely has to go on this year with the pay increases that have already begun," Arumäe said, adding that only a part of the workers had received increases so far. "You have to help the rest catch up too," she added.
The fresh outlook on Nordic economies by SEB upholds the economic growth forecast on Estonia for the current year at 3.3 percent, unchanged from the estimate published in November.