Economy may cool, extent up to us, says prime minister

Prime minister Jüri Ratas (Centre).
Prime minister Jüri Ratas (Centre). Source: Ken Mürk/ERR

Prime Minister Jüri Ratas (Centre) says that the Estonian economy will see a slight cooling, though the extent was largely dependence on entrepreneurs and the state itself, Baltic News Service reports.

Speaking at the Äriplaan 2020 ("Business Plan 2020") conference organized by business daily Äripäev in Tallinn on Wednesday, the day after unveiling the state budget for 2020, Ratas said that the moderate slowdown relates to both global trends and narrowing export opportunities, adding that both entrepreneurs and the state need to work to increase efficiency.

"In order to grow faster and take advantage of our capabilities, Estonian entrepreneurs need to contribute to increased productivity by increasing their competitiveness, expanding their activity in target markets, and selling more and for more money," Ratas said, according to BNS.

"A tense situation on the labor market is nudging towards dealing with innovation, automating and digitizing processes, and lower demand drives to improve one's product or service," he continued.

"New opportunities are often created in the course of meeting challenges. Next year, we must all make every effort to be faster, more flexible, more efficient and smarter. This also includes the government sector," he added.


The prime minister said that the state backed innovation.

"The government's wish is to set an example as an innovator, cooperate with smart entrepreneurs and encourage more innovation in the private sector as well," he said.

As a result, tax incentives for research and development, streamlining entrepreneurship-related doctoral studies, and applied research in computers were all on the table with the government's economic plans for the next six months.

In Q1 2020, the state's research and development (R&D), innovation and entrepreneurship development plan 2021-2035 also needs to be completed, to meet these ends, bringing together R&D and business on the way.

"It is certainly a source of growth that holds great potential and part of the country's business plan," Ratas said, adding that the new foreign policy development plan still to be voted on at the Riigikogu will refine business diplomacy in boosting Estonian exports.

Climate change

The public and private sectors also need to be in concert on climate change, the prime minister said.

"Initial assessments show that achieving a climate-neutral Estonia by 2050 is technically possible with cooperation between the public, private and third sector, as well as potentially beneficial in the long term if strategically smart investments are made," he said.

"The volume of investments needed for this is currently estimated at about €16.7 billion, of which €12.1 billion should constitute investments made namely by the private sector," he continued, noting that such a move towards climate neutrality brings job creation, economic restructuring opportunities and long-term benefits of change.

State budget

Speaking on the previous day's 2020 state budget announcements, Ratas said that the coalition was was committed to structural budget balance and a conservative budget policy, adding that state budgets would be more flexible in future thanks to budget revision.

"Revision will provide a better overview of the state's expenses and how well the expenses are meeting the target. Social benefits need to reach those in need, entrepreneurship support must boost economic growth, the school system must give everyone a good start in life, infrastructure investments need to make mobility faster and more comfortable. If it turns out that some public services could be provided with better quality or more economically, changes need to be made. The result will hopefully be a state budget that will be based on our capabilities as well as needs as much as possible," the prime minister said.

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Editor: Andrew Whyte

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