Editorial: no need to panic, no cause to frolic

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At change of year, we look back and we look ahead. As shown by the traditional Postimees prediction by economists and an overview of 2015, we have no need for panic while a basis to euphoria is absent as well. 

In 2015, (security politically) the world was a restless place. The military conflict in Ukraine and the ensuing Western sanctions against Russia (including the economy). The Greek debt crisis raising a question mark over eurozone’s future. The Syrian war also joined by Russia. The wave of refugees thus far unmanaged by the EU and continuing to test the foundations of the bloc.

While not causing cataclysm in global economy not violent up-and-downs on stock markets, the above have doubtless affected the overall feeling of security. The closer the conflict, the more immediate the effect on markets. For us, this is especially felt with Ukraine in view.

Even so, the overall picture shows the water to be slopping in the same bed. QE and investment support have indeed stimulated the economy but have (at least around here) failed to bring a major effect – not much growth detected. «While we did not know exactly which black swans would come out, we felt certain there would be some obstacles remaining,» as told Postimees by last year’s sharpest forecaster and LHV economist Heido Vitsur.

At the beginning of December Eesti Pank economist Rasmus Kattai said the declining feeling of security may be increasingly reflected in economic figures short-term. It’s not as much the issue of the ordinary working man, but the entrepreneurs who dare not make bold investments, such as would boost economic growth.

By central bank and commercial banks alike, economic forecasts were repeatedly lowered last year and for the new year they lay low for starters. Regarding the world and the eurozone, the IMF has already cut its outlook for 2016. Understandably, the tendencies take an effect on predictions as ordered by Postimees. «Boring,» is what quite a few say, among the economists, regarding the situation.

With potential growth areas, enterprise linked to technology has been and will be a way. Start-ups offering all kinds of new solutions, smart devices, robotics – key words for success in an economy with shrinking numbers of working hands.

Which means the new developments need to be supported and not blocked by fresh regulations, while investing in education and research. In his end-of-year address, the prime minister spoke on increasing financing for research and development come spring. Let’s hope it’s not just words.