Ardo Hansson: companies have started to invest more
Speaking at the business conference Äriplaan 2018 on Thursday, Governor of Eesti Pank Ardo Hansson said that the growth in exports and investment in the first half of the year gave hope that the economy is coping with ever sharper labour shortages, but it will not be able to maintain the current rate of growth of 6%.
The Estonian economy has performed better than expected as the global economy has grown. Higher inflation in foreign markets has supported growth in the export income of Estonian companies. “It should be noted however that corporate investment has also increased this year, and this is very important for each individual company and for the economy as a whole. If companies develop because of new investment, and people move to work in places where more value added can be created, the Estonian economy will advance and incomes rise even though employment can not rise significantly further”, said Mr Hansson.
People have started to change jobs more frequently in recent years and it is important in this that the changes are in the appropriate direction. “If additional workers move to industries focused on domestic consumption or if they change jobs just to get a higher wage, it would be a danger signal of overheating in the labour market. But if workers are moving to sectors with higher value added or if they are changing job to get better working conditions, it is a positive change in terms of economic development”, he observed. “If there is a shortage of labour, workers will go to the employer offering the best conditions, where investment has been made in both production facilities and in people”.
The Estonian economy has grown rapidly in most sectors and growth has reached almost 6%. “Despite the impression the growth figures for the Estonian economy may give, it is not wise to set expectations for the future too high on the basis of them. Growth will not accelerate any further in most other countries, rather it is stabilising and our ability to grow in the future will depend primarily on increasing the return on investment”, Mr Hansson said.