Estonia increasingly moving toward being a service-based economy
While 15 years ago, services accounted for 68 percent of Estonia's GDP, this year it will reach 74.5 percent. However, if Estonia wants to be a prosperous society, the country will continue to need a competitive and smart industry, according to Minister of Economic Affairs and Communications Erkki Keldo (Reform).
The services sector of the Estonian economy, which includes trade, tourism, public administration and other services, is growing all the time, while the share of industrial activities has been declining. In 2010, the service-based economy accounted for 68 percent of Estonia's GDP, while ten years later it was up to 73 percent. This year, the share could reach 74.5 percent, according to ETV news show "Aktuaalne kaamera."
"In a developed society, the share of services is always growing, step by step. If we take Estonia, different digital services are also an area where we export. We have really excellent companies in the IT sector and in digitalization. They are also exporting," said Minister of Economic Affairs and Communications Erkki Keldo (Reform).
A large services sector will help reduce Estonia's external trade deficit. While the goods account is in deficit, the services account experiences an ever-increasing surplus.
"There has been a very clear trend over the last few years that the services balance is positive and thus balances out our current account. The volume of services is growing faster than the volume of goods on the external side," said Eesti Pank economist Mari Rell.
Andri Haran, executive manager of the Estonian Mechanical Industry Association, said industry is still the backbone of the Estonian economy. The manufacturing sector creates more jobs and exporting industries also generate more added value.
"And if the manufacturing sector does better, the service economy will do better. After all, there has to be someone who consumes the services. I think we've got our feet on the ground, that the worst is over. We're going to see clear rays of light, next year especially," Haran said.
Erkki Keldo added that if Estonia wants to be prosperous as a society, it needs to have both a service economy and an industrial economy. "There is a lot of competition in the world for new industries and investment, and that is why with the current government we have taken several initiatives. One of them is the large investment measure, whereby we want to see existing industries grow, while on the other hand we also want to see new industries come to Estonia," Keldo said.
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Editor: Aleksander Krjukov, Michael Cole
