SEB analyst Mihkel Nestor said on Tuesday if forecasts prove to be correct, and the economic outlook improves in the early summer, it is difficult to imagine today that there will long-term problems in the economy.
Estonian industrial production fell for the eighth consecutive month in January. In January, the decline was 11 percent year-on-year.
Electricity production dropped by 59 percent due to the warm winter and rising carbon prices. At the same time, the decline in industrial production was broad-based, with most sectors declining.
Manufacturing shrank for the fifth consecutive month. The decline was 4 percent in January, a slight decline from the previous few months. Now, the rapid spread of coronavirus is likely to affect Estonian industrial production.
Nestor told ETV's "Aktuaalne kaamera": "Industrial production was already down in the first half of the year. The manufacturing industry predominantly in the last quarter. The overall external environment was not favorable even before the outbreak of the coronary virus."
Nestor said SEB's view is quite pessimistic. "Looking at our main trading partners, their import demand for this year was not very high. Looking at recent events, this first half of the year will be relatively difficult," he said.
He added it is difficult to say whether there is a recession ahead.
"I myself tend to be more optimistic today. Just looking at the reasons. Parallels can also be drawn here with the 2008 financial crisis. These reasons are still relatively different. We see a temporary problem caused by the disease on the supply and demand side. But if those forecasts predict turn out to be true and that the situation will improve as summer begins, the considering that the money supply is still relatively high, it is still difficult for me to imagine long-term problems."
Editor: Helen Wright