Speaking at the annual economic conference of Äripäev, Prime Minister Kaja Kallas (Reform) said that the current economic situation favors the implementation of structural reforms.
In her speech, the prime minister said that while the economic situation is usually a clear boom or a clear downturn, this is not the case today. "The situation is unusually multifaceted. While the GDP, industrial production, and export growth are clearly disappointing, the high overall profitability of the business sector, low unemployment, and much more secure energy supplies as we enter winter this year are all very positive signs," Kallas said.
According to Kallas, Estonia has now overcome both the inflation and energy crises. "In addition to the sharp decline in energy prices and improved energy availability, I believe that the steps taken so far to reorganize public finances also helped to reduce inflationary pressures," the prime minister said.
"Well-managed finances mean a high national rating, which means lower interest rates for entrepreneurs, low inflation, foreign investments, as well as the ability to plan business activities for the long term," she stressed.
The prime minister called on businesses to think about what could be a new source of revenue for the country to help find the missing money to ensure comprehensive security. "We have to come up with a solution by the end of June," she added.
Speaking about the economic difficulties, Kallas highlighted the continuing economic downturn in Northern Europe, especially in the real estate and construction sectors. These constitute an important market for Estonian companies, whose ties with Sweden and Finland are much closer than those of our Baltic neighbors.
The security crisis also continues. "Russia is always testing how far they can go, which is why we have increased our defense spending to 3 percent of the GDP. We are better protected today than ever before and this is the most important pillar of Estonia's business environment," she said.
The decisions of the government not to cut costs on higher education, to boost green reforms and to lower the tax burden on the workforce should contribute to this.
Editor: Kristina Kersa