Developments in line with central bank’s forecast

According to Deputy Governor of Eesti Pank, MÄRTEN ROSS, who gave a presentation at a business lunch of American Chamber of Commerce Estonia on 25 January, Estonia’s economy is adjusting as expected.

“While Estonia’s domestic demand has decreased, the exports growth has remained strong and external balance is showing signs of improvement. Although price pressures are decreasing in some sectors, the agenda of indirect tax increases and the rise in global food prices will have an impact on the inflation indicator in the near future. Price growth will slow down in the second half of 2008,” said Ross. “The external economic environment is somewhat more complicated as well. It is yet uncertain to what extent the global financial turbulences will influence this year’s European economic developments,” said Ross, adding that in the changed economic conditions, Estonia’s further economic growth will be supported by the strong financial sector and the surplus-orientated budget.

“One of the key factors in maintaining Estonia’s competitiveness is our labour market flexibility which, if necessary, would contribute to a rapid relocation from less efficient companies to those that are more competitive and all this together with a relevant training,” commented Ross.

For the presentation of Märten Ross, see the web site of Eesti Pank:
www.bankofestonia.info/pub/en/dokumendid/publikatsioonid/seeriad/koned/

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