Decrease in Annual Employment Figures Probable, Says Central Bank
Bank of Estonia economist Orsolya Soosaar said figures released today indicate that employment has taken a hit in the annual comparison, which she said can be attributed to the weak economy.
A Statistics Estonia report released today found that annual employment growth slowed to 1.1 percent in the third quarter.
But Soosaar said the statistics agency had not yet calculated in the shrinking working-age population as a result of migration and an aging workforce. Therefore, she said, employment was likely to have taken a fall in the yearly comparison.
Furthermore, adding in seasonal factors, employment also decreased from the previous quarter, she said.
Soosaar said rising unemployment was expected in light of several quarters of weak economic growth and simultaneous, rapidly rising salaries.
"Premature growth of labor costs cannot last long and is often accompanied by corresponding employee numbers and salaries," she said.
In the coming quarters, employment will depend on the flexibility of wages and work hours, she said.
"Nevertheless, a broad decline in employment is not likely. The improving export markets will step by step help speed up Estonia's economic growth and allow for the more efficient utilization of the workforce," she said.
In the first, second and third quarters, GDP growth was 1.3 percent, 1 percent and 0.4 percent.
According to Statistics Estonia, unemployment was at 8.1 percent in the third quarter, compared with 9.7 percent in the same quarter of 2012.