Whereas analysts and businesspeople had in the preceding (ie. second) quarter hoped that the situation in the economy would improve next year, this is not the case here. 

Peeter Raudsepp (pictured), director of the Estonian Institute of Economic Research told AK that: "The economic cycle continues to decline and in a situation where there are no real solutions in sight. Yes, I have used the word that our economy is in stagnation."

Virtually all economic sectors are currently experiencing difficulties due to a lack of demand for goods and services, while issues relating to a lack of innovation and competitiveness have increased significantly, AK reported.

Raudsepp added: "The problem relating to capital has eased, as it's just not needed as much as it was, as there's not as much investment; the lack of skilled labor is not seen as much of a problem now, as it's not needed as much anymore either. There has also been a lack of confidence in the government's economic policy."

One company, Inission, a metals concern located in Lagedi, just outside Tallinn, has so far bucked the trend as work is coming in due in part to the parent company being located in Sweden and several large clients being on the books, though even then, there are challenges.

CEO Nadežda Dementjeva told AK that: "Everything has gotten more expensive. First of all, energy sources give rise to concern, a big problem last winter, and but this winter it seems it will be much the same, and this all affects our competitiveness."

The sector itself is not doing well overall, she added.

"Twenty-two companies have already closed their doors this year, and of course, there is an ever-present fearfulness. We have been fighting with Covid issues for two or three years now, then came the economic crisis. We would like more stability for companies and for industry," Dementjeva added.

The joint Enterprise Estonia (EAS)/Kredex has a budget of €100 million for 2024 for business loans; the economic affairs ministry has a fund of a further €146 million in business support, across over 30 different measures, AK reports.

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