The recovery of the economy depends on when the vaccine against the coronavirus will be ready, macroeconomic analyst at the Ministry of Finance, Madis Aben, said on the ETV current news show "Aktuaalne kaamera" on Monday evening.
The economy will decrease by 5.5 percent this year, the ministry has forecast, the worst of the crisis has been overcome and next year the economy will start to recover.
Aben said the predictions are based on an assumption that coronavirus restrictions which were introduced in spring will not be established again. The other assumption is that the spread of the virus will slow down in a year, which would allow the economy to recover as normal.
Aben noted there is no full clarity regarding the vaccine but the messages from the virologists and interviews with Bill Gates give the support to this claim.
Aben said everybody has gotten smarter than in the first months of the crisis but making an economic forecast in the current situation is still very difficult.
"I have to admit that during the last 50 years, the weather forecast has improved a lot and is more and more precise, but I wouldn't say that about the economic forecast. The economy is such a complex mechanism and we have to accept that this complexity will stay. Uncertainty is very significant," Aben said.
If in good times the unemployment rate in Estonia has been at 4 percent, then according to the economic forecast, the unemployment rate will increase to 7.5 percent this year and to 8 percent next year. According to Aben, it will not be as low as 4 percent again for a long time.
"Some estimates say that 4 percent is too low in Estonia, because it indicates a certain warming of the economy, maybe not overheating yet. That is why we do not see the unemployment rate at 4 percent again in the coming years," Aben said.
Editor: Roberta Vaino