2014 Favorable for Growth, Says Analyst ({{commentsTotal}})

Ruta Arumäe, an economic analyst
Ruta Arumäe, an economic analyst Source: Photo: Postimees/Scanpix

SEB analyst Ruta Arumäe said that the world is optimistic at the beginning of the current year and Estonia is ready for growth.

Arumäe said on the bank's website on Friday that central banks will continue to stimulate economies, while weaker Chinese demand will lower prices of raw materials and export deflation to developed nations.

“Factories across the globe livened up at the end of last year, increasing production by the highest rate in three years, feeding hope that global economic growth will pick up this year,” Arumäe said.

Speaking about the Eurozone, she said that a decrease in Spanish and Italian bond interest rates is good news.

She said that the Russian ban on several Estonian dairy and fish producers at the beginning of the year mean that those companies will have to invest in channeling their products to other markets, although export numbers are unlikely to suffer.

Electricity prices hindered economic growth in Estonia in 2013, but according to Arumäe, the situation is now reversed, as renewable energy fees have already been lowered and power network fees will decrease in April. She said that with those decreases, coupled with the warm winter, companies are able to save on heating and electricity costs.

The weather conditions will also boost the construction industry.

The retail sector, which was one of the most successful last year, is expected to continue growth, though the 7 percent expansion in turnover it saw last year is likely to remain unmatched. The minimum wage increased by 11 percent on January 1, Arumäe noted.

Public sector salaries are also set to rise, she said.