EKI: Digital development reduced impact of emergency situation measures

Estonian Institute of Economic Research Director Marje Josing.
Estonian Institute of Economic Research Director Marje Josing. Source: Siim Lõvi/ERR

Director general of the Estonian Institute of Economic Research said Estonia's digital development had significantly reduced problems caused in the emergency situation. She also said the world had reacted too slowly in assessing the risk of and preparing for COVID-19.

Speaking at a press conference on Monday, director general of the Estonian Institute of Economic Research (EKI) Marje Josing said Estonia's digital development has significantly reduced the problems of entrepreneurship caused by social quarantine and enabled many companies to continue to operate in difficult conditions through teleworking. "The education system has also done well in using digital solutions," she added.

Josing said that countries and companies around the world were late in assessing the risk of and preparing for COVID-19.

"Through global business, transport and tourism, the world's countries are highly interconnected and the rapid growth of dangerous new viruses into a pandemic is easier than ever before," Josing said on Monday.

EKI experts said the situation of the Estonian economy was relatively good until the beginning of March. At that time, the current situation was given 69 points, which is 24 points less than in the previous survey in December. Private consumption was also assessed as positive and the investment situation as good, spokespeople for the Ministry of Economic Affairs and Communications said.

However, the experts' forecast for the next six months deteriorated significantly and the aggregate indicator of the economic climate stood at -26.1, which is the worst result in the last 10 years.

The economic confidence index, which reflects business and consumer confidence, in March fell the most in the European Union since 1985, falling from 8.2 points to 94.8 points. The economies of southern European countries were already affected at the beginning of March, and the crisis reached the northern countries with a shift of a few weeks.

Kaupo Reede, head of the department for economic development at the Ministry of Economic Affairs and Communications, said the state has taken several steps to support entrepreneurs in these difficult times, and feedback from entrepreneurs on the design of economic aid packages is also very welcome.

"In the case of the first support package for entrepreneurs, our partners are Enterprise Estonia and Kredex, where the precise conditions of the measures are developed together with those in need and professional associations, so that they meet the needs of companies and offer relief," Reede said.

Kredex's loan guarantee can be used through a company's home bank or a direct loan through Kredex. "It is definitely in our interest that Kredex's measures also help micro- and small enterprises and that advice for all entrepreneurs is available in Estonian, Russian and English," he added.

He noted that since Kredex's crisis measures have just been opened, work on them is continuing and changes in the conditions will probably have to be made.

"We are currently collecting feedback and suggestions from entrepreneurs on an rolling basis, analyzing them and, if necessary, implementing the measures in specified form. As it is not known today how long the crisis will last, we are flexible with economic aid packages to react quickly to the situation," Reede said.


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Editor: Helen Wright

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