Estonian businesses may soon reach a limit beyond which it will no longer be possible to progress, Olavi Lepp, head of Swedbank Estonia, told the Delfi Portal's business page, and some companies may fold as the country's international competitiveness continues to wane.
In an article which appeared on Delfi Ärileht Friday (link in Estonian), Lepp said: "It's not as if our customers are doing anything inherently bad or wrong, but rather the surrounding environment is somewhere that clearly demands its share," adding that Estonian companies are facing much pressure on their liquidity," adding that Swedbank has been noticing changes in the behavior of their customers.
At the same time, while plenty of money is flowing out, companies will have to think about how to cover their revenue side, and, according to Lepp, it is clear that businesses' cash flows are under severe pressure.
"Those who succeed in passing on the costs to the customers will be able to break even. However, if this exceeds their capabilities, more serious problems will surely await them," he added.
The competitiveness of Estonian companies in export markets also plays an important role, Lepp added.
"Taking a look at Scandinavia and Central Europe and observing the increase in costs, the question arises whether Estonia is an attractive place for others to purchase goods and services from or not. This (lack of competitiveness - ed.) may end up with some Estonian manufacturers being forced to stop production," Lepp added, highlighting the severity of the situation
Editor: Andrew Whyte