Ardo Hansson: The Estonian economy has performed well given the European sovereign debt crisis

In a speech on Friday evening in Põlva to the Estonian Economic Association, Governor of Eesti Pank Ardo Hansson said that the Estonian economy has performed well given the sovereign debt crisis in the euro area, and its strong competitive position means it is in balance, although that balance is fragile.

“The external environment remains complicated, but in recent months there have been positive signs, as markets have been more stable and people have felt a bit more confident in the future. The euro area economy is now reaching a more solid platform, and this needs to be borne in mind when assessing the outlook for the Estonian economy,” said Hansson.

He told the annual conference in Põlva that there is a risk of setbacks stemming from the external environment, but he also emphasised the risks that can come from the success of the economy. “If the economy continues to grow faster than expected, the wage pressure that is already perceptible may increase. If wages grow faster than productivity, then we will create additional inflation for ourselves.”

The governor of the central bank highlighted the role of Estonian economic policy in managing these risks. “Strict budget discipline and well-ordered public finances are an important source of confidence, and for this reason it is important that the government stick to its target of achieving a budget surplus in 2014. Equally, active labour market measures need to be taken in order to secure long-term economic growth by lowering structural unemployment” he said.

For further information:
Ingrid Mitt
Public Relations Office
Eesti Pank
Eurosystem
Tel: 668 0965, 512 6843
Email: ingrid.mitt [at] eestipank.ee
Media queries: press [at] eestipank.ee