TALLINN - SEB economic analyst Ruta Arumae said that the cause of the low economic growth levels in the second quarter, a quarter-on-quarter growth of 0.1 percent and year-on-year growth of 1.3 percent, was not caused just by exterior factors, but also by domestic factors, reports Public Broadcasting.
Arumae said that Estonia’s economic growth fell in the second quarter to a level that is usual for the old, slow and stagnated Europe, but Estonia is not yet in a state where future growth is of no interest.
“Undoubtedly Estonia’s low economic growth can be, and has to be, associated with the weakness of the foreign environment. But if we look at figures now more seriously, we can find a rather strong export growth figure: 8 percent. Thus not all guilt belongs to the foreign environment,” said Arumae. Although Finland’s economic fall is 2 percent already, exports have survived well so far.
She said that domestic factors must also be behind the weakness of the economy, which in turn is the logical result of the lengthy foreign recession.” Most likely the fall of investments continued in the second quarter, which on the one hand can be explained by the fact that an extraordinary amount of investments were made last year, both by the state sector and the private sector and this year both extraordinary investments have disappeared. Ordinary investments have been most likely reduced since the outlook for the future doesn’t look as good as it may have seemed last year, on a background of rather deceiving economic growth figures,” she explained.