Although employment rates in Estonia are the highest they have been in 15 years, unemployment will increase in 2016 and 2017, Swedbank senior analyst Liis Elmik said.
“The rise in labor costs and decrease in the labor force will force businesses to swap workers for machine. The significant decrease in export turnovers and prices will put pressure on jobs in certain industry sectors and in agriculture,” Elmik said.
She added that state administrative reform will shrink the public sector.
Work ability reform will force people with decreased capabilities to look for jobs, she said, adding that the capacity of companies to hire decreased capability employees is limited. Elmik said that this factor will increase employment rates at least in the beginning.
According to Statistics Estonia, the unemployment rate is currently 5.2 percent, nearly at 2007 levels. In 2010, the peak of the recession, unemployment was above the 15-percent mark. The number of people currently out of a job is 37,000, 15,000 fewer than a year ago. A third of all who are unemployed have been seeking a job for more than a year.
Editor: J.M. Laats