According to the results of a survey commissioned by the Estonian Employers' Confederation in the second quarter of this year, 66 percent of entrepreneurs consider the Estonian government's actions to be negative for the business environment — up from 50 percent last quarter and just 35 percent in the second quarter of last year.
The most negative assessment yet of the government's economic policy reduces the confidence of entrepreneurs. According to results of the economic speedometer survey conducted by the Institute of Economic Research, the Estonian economy developed in the second quarter of 2017 at a speed of 79 kilometers per hour, while without the government's actions the speedometer's result would have been 87 kilometers per hour, the confederation said.
The entrepreneurs surveyed mentioned several reasons for being dissatisfied. For example, a tax package entered into force during the second quarter which increased companies' tax burden as well as the administrative burden. Entrepreneurs consider the tax policy to be a measure to hastily cover the cost of the state budget.
Entrepreneurs would have liked to see the government analyze the impact of the tax package on the business environment and visibly weigh its alternatives before it was adopted. In their opinion, the government lacks understanding of how to stimulate the economy, and frequent changes in the tax system which leave little time to react increase the insecurity of entrepreneurs.
Another source of entrepreneurs' dissatisfaction is the annual migration quota, which was exhausted in the second quarter this year already. According to entrepreneurs, it had been forecast that the quota would be exhausted by mid-year, but the government put off resolving the issue.
The number of working age individuals decreases by about 6,000 people every year, while the number of vacant positions in Estonia is the largest it has been in seven years. Estonia's industry has developed faster than the country's population has increased, and thus one in every five industrial companies is prepared to use foreign workforce to alleviate the workforce shortage. Results of the economic speedometer survey show that there is a great interest in hiring employees in all business sectors.
For the past few years, Estonia's annual immigration quota has equaled 0.1 percent of the country's permanent population, totaling 1,317 people this year. The first time the quota was exhausted was last December; this year, it was exhaused in the second quarter already.
The most positive results of the economic speedometer survey concern the construction and retail trade sectors. In these sectors, entrepreneurs forecast a price increase, and they also see as positive the previous quarter's sales volumes and the estimated sales values in the next quarters.
The Estonian Employers' Confederation uses the quarterly economic speedometer index to measure entrepreneurs' assessments of the economic situation and satisfaction with the Estonian government's work to improve the business environment. The index is based on the replies of close to 1,000 entrepreneurs. With support from the European Social Fund, the survey is conducted by the Estonian Institute of Economic Research.
Editor: Aili Vahtla