OREANDA-NEWS. November 19, 2012. According to Statistics Estonia, employment grew 1.1%, year-on-year, and the unemployment rate fell to 9.7% in the third quarter of 2012. Though the rate of employment continued to grow, moving towards the pre-crisis peak, the growth pace slowed markedly, reported the press-centre of Eesti Pank.

It declined compared to both the third quarter of 2011 and the second quarter of this year (taking into account seasonal factors). Slower employment growth shows that the labour market is adapting to slower economic growth.

Further economic growth will have to be driven mainly by productivity. Employment growth will be increasingly more curbed by labour shortage. Though the general amount of the unemployed is still relatively large, the current unemployment rate of 9.7% may, based on Eesti Pank’s assessment, start giving rise to wage pressures.

The number of the long-term unemployed has shrank, which is positive news giving hope that the problem of structural unemployment will ease. According to Statistics Estonia, the amount of the inactive is the smallest of the past twenty years, so their entrance to the labour market would not ease the situation to a great extent.

The number of the discouraged and of the people inactive due to their pension age was also small in the third quarter compared to the past twenty years. In order to bring additional labour force to the labour market it is important to be more active in implementing the necessary economic policy measures.