The biggest challenge for the Estonian economy is falling demand news

While analysts and businessmen believed in the previous (ie. second) quarter that the economic situation would improve next year, that is not the case here.

Peter Routsep (pictured), director of the Estonian Institute of Economic Research, told AK: „The economic cycle continues to decline, and there are no real solutions in sight. Yes, I used the word our economy is stagnating.”

Almost all economic sectors are currently experiencing difficulties due to lack of demand for goods and services, while problems related to lack of innovation and competitiveness have increased significantly, AK reported.

Routsheb added: „The problem of capital has eased, there is not as much demand as it was, there is not as much investment; the lack of skilled labor is not seen as a problem now because it is not needed. There is also a lack of confidence in the government’s economic policy.”

Inission, a metals concern based in Lägedi just outside Tallinn, has so far bucked the trend, with jobs coming in partly with a parent company based in Sweden and several large clients on the books. Still there are challenges.

CEO Nadežda Dementjeva told AK: „Everything has gone up in price. First of all, energy sources are causing concern, last winter was a big problem, but this winter it will be very similar, and it affects our competitiveness. .”

The sector as a whole is not doing well, he added.

„Twenty-two companies have already closed their doors this year, and of course there is always fear. For two or three years we have been struggling with Covid issues, and then the economic crisis came. We still want stability. For companies and industry,” Dementjieva added.

Joint Enterprise Estonia (EAS)/Kredex has a budget of €100 million in 2024 for commercial loans; The Ministry of Economic Affairs has a further 146 million euros in business support in 30 different activities, AK reports.

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