TALLINN - Estonia's economic confidence index has plummeted to just over 50 percent, the lowest level since shortly after the country regained independence.
Data from the Estonian Institute of Economic Research (EKI) indicates that the economic confidence index fell to 54.4 percent in December, the lowest level since 1992.
The confidence index has reached a low point throughout Europe, with the average in the European Union as a whole reaching 63.5 percent 's the lowest level since 1985. The economic confidence index is historically at the lowest level in all member countries of the European Union.
End of the year numbers released by the EKI showed plummeting economic indicators across the board.
The industrial companies security indicator hit negative 40 in December, the lowest level since the industrial barometer was first compiled in 1993.
In the final month of the year, 63 percent of companies reported that they received a lower than average level of orders, while 58 percent of the companies surveyed said they had problems with export orders. The EKI study found that 34 percent of companies received an average number of orders while just 3 percent reported an above average level.
Construction companies also hit a record low security indicator of negative 67.
Moreover, many construction companies were pessimistic about the future, with 81 percent reporting that they expected their work volume to decrease in the coming three months. Only 4 percent said that they expected a growth in the volume of construction work over the next quarter. In December, 51 percent of the companies were planning to lower the prices of construction work during the next three months.
The security index of retail trade companies was negative 48 in December, the lowest level since 1992 and 15 points lower than in November, EKI said.
FURTHER TO FALL
Though economic indicators have already reached some of the lowest points in Estonian history, the EKI said that things would still get worse before getting better.
In a study carried out by the institute in December, 76 percent of the experts surveyed predicted that in six months the economy would be in worse shape than it is in now. The remaining 24 percent said that the economic situation would remain the same.
"Expectations for the next six months are cautious. It is likely that there will not be a turnaround in the economy during the following two quarters," the institute said.
The experts were only mildly more optimistic about private consumption over the next half year, with 65 percent forecasting that private consumption would decrease. A total of 26 percent predicted that it would remain at the present level while 6 percent said it would increase.
One of the only areas that experts were positive about was inflation. A total of 93 percent predicted that inflation would be lower after two quarters than it is now.
Many were also optimistic about the current account deficit, with 70 percent predicting that the balance would improve over the next half year. Only 12 percent, however, predicted that exports would increase over the period 's while 6 percent expected an increase in imports.
More than half the economic experts interviewed by EKI believed that the bottom of the economic fall would arrive in the second half of this year.
