Economic Growth Increasingly Dependable on Human Factor, Says Bank of Estonia Deputy Governor
The human factor has an increasing effect on economic development in Estonia as the workforce becomes smaller due to demographic changes, said Ülo Kaasik, the deputy governor of the Bank of Estonia.
Kaasik said unemployment has decreased in recent years (according to Statistics Estonia, it was 6.9 percent in the second quarter), but that figure is unlikely to decrease much more as the unemployed do not have the qualifications for jobs offered.
He said the state should focus on re-educating the unemployed to fill gaps.
“The economy must adapt to a smaller workforce as there will be 30,000 fewer people in the working age in five years in Estonia,” he said, adding that low-productivity businesses will struggle to survive in an environment of quick salary increases.
The low level of public debt will allow Estonia to push through reforms when the ageing population begins to put stress on the social and medical system.