Estonia's economy contracted by three percentage points last year, and has been in decline for two consecutive years now.

Speaking to ETV news show "Aktuaalne kaamera" (AK) Friday, Kattai said last year's decline indicates first and foremost that there had been a change in the economy's production volumes.

Kattai said: "We are in this type of a situation in the economy whereby one should not evaluate the health of the economy just on the basis of one indicator alone."

"The above figure gives a significantly poorer picture than do many other indicators. Plus I would like to stress the situation on the Estonian labor market, where unemployment is relatively low, and employment remains high," he went on (the one does not necessarily fully follow from the other when one takes into account, for instance, under-employment, demographics etc. – ed.).

Kattai concurred with those that say that effects of the war in Ukraine are the largest single contributor to the current economic downturn, particularly with regard to manufacturing sub-sectors.

"And if you consider whether Estonian companies could have done something about that then, yes, quite a few risks were left to fate; they were not mitigated," he added.

The state of the economies in neighboring countries will also affect Estonia's economic recovery this year more than will the monetary policy decisions coming from the European Central Bank, Kattai added. "Compared with the general current situation regarding the European economy, our neighboring countries are in a somewhat worse condition."

Kattai added that what is needed most now is confidence: This will allow people to make plans, and companies dare to make investments. "There are plenty of funds available for making investments, in company accounts," he concluded.

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