Experts Opinion of Estonian Economy Improves
OREANDA-NEWS. July 13, 2010. Experts of the Estonian Institute of Economic Research (EKI) have found that the situation of the economy in June was better compared with the first quarter of the year.
On the scale from one to nine points, the experts' opinion of the situation of the Estonian economy was 2.8 points in June, one point better than the previous assessment in March.
The situation was found to be satisfactory by 44 percent and poor by 56 percent of the experts. In March the same indicators were respectively 21 percent and 79 percent. In the opinion of experts that assessed the general situation of the economy as non-satisfactory the reasons were the high unemployment rate and the low level of the gross domestic product, which, at best, is only slightly above the bottom level of the crisis.
Improvement of the economic situation gives grounds to presume that the 2.3 percent economic fall in Q1 has been replaced by a small rise.
But domestic demand remains weak as before and economic activity has mainly risen in the export sector. Unemployment has started to fall in the past few months and thanks to activity of the export sector sale of industrial output has started to sharply grow, and is becoming one of the main engines of emerging from the crisis.
According to EKI, most of the entrepreneurs have become adapted with the situation of crisis and have found new business opportunities.
Compared with last year the general situation of the Estonian economy is considerably better according to EKI experts - as many as 59 of the experts regarded the situation as being better than the years ago, and 12 percent considered the situation to be worse. 29 percent of the experts considered the situation to be the same compared with the year before. The overall assessment was 6.9 percent.
The economic reliability index, which reflects consumer confidence, as well as the forecast of the state of the economy as seen by leaders the industrial, building, trade and service sectors, was 103.3 percent in Estonia in June, 6.1 points more than in March.
EKI leading researcher Leev Kuum told reporters at the press conference presenting the results of the economic forecast at the Ministry of Economic Affairs on Wednesday that Estonian economic confidence had certainly improved thanks to meeting of the Maastricht criteria and the forthcoming transition to the euro.
The EKI experts assessed the situation of investments in June to be one point worse than the general situation of the economy, but one point better than in March. It proceeds from this that the investment activity remains generally low but animated in Q2 against Q1.
The situation of investments was assessed as poor by 81 percent and as satisfactory by 19 percent of the experts.
The experts assessed the situation of private consumption to be moderately better in June than in March, but still unsatisfactory. The situation of private consumption was inhibited by the still high unemployment and the continuing fall in average wages. At the same time the trade turnover has considerably increased month on month and also consumer confidence has improved.
The EKI experts' group was generally optimistic concerning the future, assessing the general situation of the Estonian economy after six months to be 7.3 points. No expert expected the situation to deteriorate.
In all the development of Estonia in 2010 so far is in agreement with the positive forecasts of EKI experts group published in December 2009 and in this March.