Like the way labour market is going: is the wage growth sustainable? Will the correction come on account of employment, or of salaries? If indeed it does come.
Talking about long-term economic growth; as the working age population is shrinking, this is even technically cutting into our hopes of economic growth. The more so our input into growth ought to come from increased productivity of employees, or investments growth.
Our agriculture is definitely in trouble. In the big picture, the effect is not that heavy if we talk about the dairy sector and its 3 percent share in GDP, but the sector definitely is in trouble.
So we have trouble spots here and there, but in the big picture I’d not dare say Estonian economy is outright drowning.
- They do talk about the self-fulfilling predictions i.e. as the state talks about signs of danger, the entrepreneurs will cease to invest and will begin putting money aside. That true?
Next to the base scenario, we always put out the risk scenario. But until the situation turns not obviously crazy, we will not go by that for the obvious reason that we would sow extra unpredictability saying this is likely especially while not really believing that. Being too conservative, the self-fulfilment would be coded into it.
On the one hand, there are the enterprises and their investments as they actually see the micro level better than we do; and private persons would also limit their consumption and begin saving more. Which would have a negative effect on economic growth in a situation where it is not needed.
- On what basis do you predict restoration of external demand for next year?
That would be the growth expectations of major export partners i.e. they themselves do expect their economic growth to be restored which would mean we would be able to export more into these nations. In a way, this is a random approach as their growth may not necessarily mean growth in the domain of our export in these nations. But it is the best comparison at our disposal. If these states would say they are going into decline, the picture would be different.
We have no better basis available, as then we would have to say we are wiser in these matters than the Swedes, Finns, Latvians and Russians put together, which we would never want to say.
Starting September 2015 – fiscal department head at finance ministry
December 2014 to August 2015 – financial adviser to Prime Minister
Since 1997 – various jobs at finance ministry
Education: Tallinn University of Technology economy faculty; in-service training at IMF