Ardo Hansson: there are no rocky reefs on the horizon, but the tailwind behind the economy is fading
Among the presenters at the Äriplaan 2019 economic conference on Thursday was Eesti Pank Governor Ardo Hansson, who said that the past couple of years have been good for the Estonian economy, but a slower rate of growth is to be expected in future.
The past couple of years have been kind to Estonian companies as demand for their goods and services has grown rapidly in both domestic and foreign markets. “Conditions will be as good for business next year, 2019, but it must be remembered that economic growth is slowing in Europe and the same is happening in Estonia, as we are very dependent on the fate of our neighbours. The impetus given by the single monetary policy of the euro area countries is also fading”, noted Mr Hansson.
He spoke about the labour market and said that people in Estonia have never previously changed job as often as they are doing now. “People are now moving from job to job even more than they did during the last boom. This is a good sign, and it shows that the economy is coping with labour shortages. At the same time that labour is moving to stronger companies though, investment in fixed assets by companies has not increased by as much as was expected. If this continues, it will be as if we have been sailing under the strong tailwind of low interest rates with our sails half-furled, and so we will have less momentum than our competitors to carry us forward when the wind dies down”.