Economist predicts purchasing power spike this year ({{commentsTotal}})

Head economist at Swedbank Estonia, Tõnu Mertsina, said that salaries should increase on 2014 pace while inflation is expected to be low, meaning that purchasing power will increase.

“Ultra low inflation will bring about an acceleration to net wage increases,” Mertsina said.

“Net salary rates will be given a boost by state measures to decrease labor taxation and salary increases in the public sector. Growth in social benefits will kick an added boost to private consumption, which will be the greatest factor behind economic growth this year and next,” he said.

Swedbank is predicting two percent growth for Estonia this year.

Speaking about risks, Mertsina said that the retracting Russian economy, sanctions and weak ruble will hit Latvia, Lithuania and Finland, and that will in turn have an effect on Estonian exports.

On the other hand, Sweden, Estonia's largest export partner, is expected to grow, he said, adding that Estonia's export volumes are likely to slow.

“Cheaper fuel does increase consumption in other areas or boost peoples' savings, but the initial estimate that the effect will translate into a 1.5-percent increase to private consumption. But that is larger than the effect from the drop in the income tax rate and increase in the tax free minimum rate,” he said.

Editor: J.M. Laats, S. Tambur

Opinion digest: Our plans do not have to bend to distorted Russophobia

In a recent opinion piece in Postimees, small business-owner and Reform Party member Vootele Päi responded to criticism sparked by Prime Minister Jüri Ratas' plans to attend a commemorative concert-service at the Estonian church in Saint Petersburg next month.

Kallas, Kasemets, Maasikas: EU is strong, no upside to losing the euro

Speaking on Vikerraadio's "Reporteritund" ahead of the 60th anniversary of the Treaty of Rome, Siim Kallas, Keit Kasemets and Matti Maasikas agreed that despite its prblems, the EU remained strong as a union.