Estonia's industrial output fell by 12 percent on year in August and Swedbank analyst Tõnu Mertsina does not believe a quick recovery is possible.
Industrial production has fallen for the last eight months, data from Statistics Estonia shows.
The country has seen the steepest decline among all European Union countries.
A third of the decline in the manufacturing industry has been caused by the wood industry. This is due to falling interest in Scandinavia.
Mertsina does not believe a quick recovery is on the cards
"Even if we talk about a possible recovery in the Nordic or euro area economies next year, it will be relatively weak and slow," he said.
"The fact that the tightening monetary policy is only just starting to have a greater impact could pose greater risks to the economy. In this respect, the risks that next year's economic picture will be worse than forecast are very real," he added.
Editor: Merili Nael, Helen Wright