Rather than new crisis, Europe in for new period of economic growth

  • 2017-08-22
  • LETA/TBT Staff

TALLINN – There is no new economic crisis coming our way and Europe is in for a long period of economic growth, Ruta Arumae, economic analyst and teacher at Mainor business school, said on Monday.

Arumae said that European economy is at the beginning of a new long-term growth cycle. "Historically, recovering from major crises takes a long time and it's only now that we can see permanent signs of the global cycle climbing out of the slump and embarking on a new wave of growth," she said in a press release.

The analyst said that the United States and Europe reacted to the crisis with different economic and monetary policy measures, which is why the U.S. cycle is significantly well ahead of that of Europe, which is only starting to display signs of recovery. "Therefore it may happen that Europe is not at the end of an economic cycle as many tend to believe, but at the beginning of new growth. This would mean a long upward ride again," Arumae said.

She added that while there might be smaller cycles of decline within the long-term growth cycle, their scale will not be comparable with the last crisis.

"This will give more leeway for businesses and also governments to make wrong decisions, because economic growth will leave many mistakes unnoticed at the beginning. But the possibility also exists to do things differently and ask yourself what can be done better this time," Arumae added.

Ruta Arumae is teacher of economic theory at Mainor business school in Tallinn. Previously she worked as macro analyst with SEB Pank and SEB investment funds from 2003-2015 and as adviser to then Estonian Prime Minister Taavi Roivas in 2015.