Speaking to ERR's "Vikerhommik" radio show, Raudsepp said there are actually no significant positive economic indicators which could be highlighted for Estonia at present.

He said: "Even the IMF on its recent mission here pointed out Estonia's issues: Falling international competitiveness, a loss of export market share, a slowdown in productivity growth."

Raudsepp had spoken the day before at the Estonian Food Industry Association (Toiduliit) annual conference, Raudsepp and said bluntly that Estonia is headed not so much in the direction of Northern Europe, but towards the bottom of the European pile.

"This rapid growth in prices affects us not only as consumers, where we have to spend nearly 1.4 times as much money in the supermarket as we did two years ago, but also the cost levels to businesses has risen," Raudsepp told "Vikerhommik."

"We can hope that the situation in export destination countries improves and demand rises, but will we then be welcome in export markets with our higher production costs in any case? Given such a cost base, we should no longer hope for the recovery of export markets. The previous status quo will not return," Raudsepp went on.

Raudsepp also said that this crisis is not an economic one as such and relates to the political situation.

"This means we should not expect that this crisis will resolve itself or that we are in a downturn phase of an economic cycle and it will simply pass," he continued.

"The economy was doing fine; it had recovered very quickly from the Covid-19 crisis. Currently, the problem is politics, but Estonian politicians should not take this personally."

"Political decisions have been made, including printing money, abrupt hikes in interest rates, starting wars, imposing sanctions and counter-sanctions, closing power plants during the green transition but without alternatives. These decisions were not made by businesspeople," Raudsepp added.

Simply relying on recovery and the end of the crisis is therefor not feasible, according to Raudsepp. "We have been whisked into a different environment and to make it here, we need to carry out reforms. These include boosting productivity and creating added value in the economy. A reset on the economy lies in the hands of business, but these changes will take time. The government, too, on the economic environment," the institute director went on.

Raudsepp said that the duration of the economic crisis during the recession of a decade-and-a-half ago will be exceeded this time as well.

"Our neighbors, Lativa and Lithuania for instance, are doing better for example, but looking at this year's economic indicators, a rise for Estonia cannot be predicted," Raudsepp said.

In Raudsepp's opinion, business will ultimately provide the solution, but it still requires certainty; that it is not hindered and unduly laden down with burdens. Estonia should also look around to observe value-based trends, Raudsepp suggested as another strategy.

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