Nevertheless, the economic growth has been rapid enough to boost profits making it easier for companies to finance investments. It was also facilitated by the high level of foreign direct investments in Estonia in the first half of 1998. According to the Estonian Institute for Market Research, the number of companies with financial constraints restraining production, did not increase. Estimates show that links between the financial and real sectors are more modest and total corporate liabilities smaller than in many other countries. The end-1997 stock exchange crash influenced financial sector outcomes with six months time lag whereas its impact on the real sector would appear even later.
Recent developments show that the crisis in Russia has a more direct impact on the real sector.
In June, businessmen were still optimistic forecasting production growth, but the disappeared eastern exports has put many producers into a very complicated financial situation.