Estonian central bank Eesti Pank expects unemployment to decline to 14.8 percent from this year’s expected 17.8 percent, a record since the country regained independence in 1991.
Joblessness will remain a serious problem in coming years as the companies are focusing on improving productivity, rather than creating jobs, deputy central bank Governor Märten Ross told journalists..
The bank increased its inflation forecast for this year from 1.3% forecast in April to 2.4%. In 2011 Estonia will have average annual inflation 2.7 percent in 2011, up from previous forecast of 1.1%.
“There is a threat the present price and wage levels will not sufficiently support new investment and job creation,” the bank said. Still, the increase in inflation in coming months due to rising food prices will probably remain temporary, it added.