New minister accuses Bank of Estonia of incompetency

IT and foreign trade minister Kristjan Järvan (Isamaa).
IT and foreign trade minister Kristjan Järvan (Isamaa). Source: Ken Mürk/ERR

New Minister of Entrepreneurship and IT Kristjan Järvan (Isamaa) finds in a Postimees opinion piece that claims by the Bank of Estonia according to which second pension pillar withdrawals have contributed to Estonia's considerable inflation should be counted among the most incompetent economic analyses in recent history.

Järvan, who used to be a passionate proponent of the second pension pillar reform, was irritated by positions voiced by central bank economist and the president's economic advisor Kaspar Oja and the Bank of Estonia's institutional assessment, both finding that money withdrawn from the pension pillar has added to inflation.

"Taking a closer look at these analyses, we can see that almost no argumentation is provided to prove these claims. It is simply a case of highlighting two conspicuous figures and concluding that there must be a correlation," Järvan wrote.

The minister recommends comparing the situation to Estonia's neighbors where no such pension reform was carried out and points out that inflation has been growing steadily in all of them since 2021.

In 2021, Estonia altered its mandatory funded pensions scheme by allowing people to pull out the so-called second pension pillar and withdraw savings, which opportunity many have since taken.


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Editor: Marcus Turovski

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