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Estonia » Economy at a Glance »

Economy at a Glance

02.01.2006

Key Facts

  • National currency: the kroon, EEK (100 sents = 1 kroon)
  • Currency system: modified currency board
  • Currency peg: 1EUR = 15.65 EEK
  • Currency peg and currency board fixed by law since June 1992 (originally to the German Mark)
  • Tax system: 23% flat income tax, reinvested corporate profit is tax free; 18% VAT

International Credit Ratings

  • Moody's: A1
  • Standard & Poor: A, outlook positive
  • Fitch: A, outlook positive
    Country ceiling rating: AA-

Key Indicators

Key Indicators 1998 1999 2000 2001 2002 2003 2004
Mean annual population (million) 1.45 1.44 1.37* 1.36* 1.36* 1.351* 1.351*
GDP at current prices (billion EUR) 5.0 5.2 5.9 6.7 7.5 8.1 9.0
Real growth of GDP (%) 4.4 0.3 7.9 6.5 7.2 6.7 7.8
GDP per capita at current prices (EUR) 3 573 3 799 4 337 4 894 5 500 6 012 6 703
Annual FDI (million EUR) 515.8 284.3 424.7 602.7 306.8 756.0 738.0
Annual FDI per capita (EUR) 372 207 310 442 226 560 549
Consumer price index compared to previous year (%) 8.2 3.3 4.0 5.8 3.6 1.3 3.0
Unemployment rate** (%) 9.8 12.2 13.6 12.6 10.3 10.0 9.7
Average monthly wage (EUR) 263 284 312 352 393 430 462
Current account balance (% of GDP) -8.6 -4.4 -5.5 -5.6 -10.2 -12.2 -12.9
Deficit(-)/Surplus of state budget (% of GDP) -0.3 -4.3 -1.0 0.6 1.1 2.4 1.7
Export (billion EUR)*** 2.400 2.350 3.569 3.696 3.642 4.003 4.731
Import (billion EUR)*** 3.529 3.227 4.616 4.798 5.079 5.715 6.727
Trade balance
(billion EUR)*** 		-1.129 -877 -1.047 -1.102 -1.437 -1.712 -1.996
Total government expenditures (% of GDP) 36.2 38.5 36.5 34.7 34.7 35.8 37.5

* Based on the 2000 Population Census;
** Unemployed/labour force according to ILO methodology;
*** Trade figures shown in special trade system

Sources: Bank of Estonia, Ministry of Finance, Statistical Office of Estonia


GDP by Main Fields of Economic Activity
(as a % of total GDP)

Field of Activity 1999 2000 2001 2002 2003 2004
Manufacturing 15.1 16.7 17.0 17.4 17.9 18.4
Real estate, renting and business services 17.8 16.9 17.5 17.2 16.7 16.6
Transport, storage and communication 13.8 14.9 15.1 14.5 14.4 14.0
Wholesale and retail trade 13.2 12.8 12.9 13.0 13.0 12.7
Construction 5.5 5.7 5.7 6.4 6.4 6.7
Education 5.5 5.2 5.1 5.1 5.1 5.1
Financial intermediation 3.8 3.9 3.7 3.9 3.8 4.1
Agriculture and hunting 3.3 3.0 3.0 2.6 2.5 2.6
Sources: Statistical Office of Estonia

Due to the accession with the European Union, the methodology of macroeconomic statistics changed. The changes concerned the calculation methodology of imputed rent and consumption of fixed capital, and changed also the level of gross domestic product and gross national income in the period 1993-2003.


Main Trade Partners in 2004

Country % of exports Country % of imports
1. Finland 23.1 1. Finland 22.1
2. Sweden 15.3 2. Germany 12.9
3. Germany 8.4 3. Sweden 9.7
4. Latvia 7.9 4. Russia 9.2
5. Russia 5.6 5. Lithuania 5.3
6. Lithuania 4.4 6. Latvia 4.7
7. Hungary 3.7 7. Netherlands 3.6
8. United Kingdom 3.6 8. Poland 3.3
9. Norway 3.3 9. Denmark 2.6
10. Denmark 3.3 10. Italy 2.4
11. Others 21.2 11. Others 24.1
Sources: Statistical Office of Estonia

Main Exports and Imports in 2004 (as a % of total trade)

Main Commodity Groups Exports
Machinery and appliances 27.3
Wood and articles of wood 13.1
Textile products 9.0
Metals and articles of metals 7.9
Agricultural products and food preparations 7.8
Transport equipment 6.1
Raw materials and products of chemical industry 4.7
Mineral products 4.6
Articles of plastics and rubber 2.5
Paper and articles of paper 2.1
Other 14.9

Main Commodity Groups Imports
Machinery and appliances 28.7
Transport equipment 12.0
Metals and articles of metals 11.1
Agricultural products and food preparations 9.1
Mineral products 6.9
Raw materials and products of chemical industry 6.9
Textile products 6.8
Articles of plastics and rubber 4.8
Wood and articles of wood 3.3
Paper and articles of paper 2.3
Other 8.1
Sources: Statistical Office of Estonia

Direct Investment Position in Estonia by Countries
as of 31 December 2004

Country million EUR % of total
1. Sweden 3 351.0 45.4
2. Finland 1 755.8 23.8
3. USA 377.1 5.1
4. Norway 209.0 2.8
5. Great Britain 202.4 2.7
6. Netherlands 193.3 2.6
7. Germany 158.7 2.1
8. Denmark 155.6 2.1
9. Russia 144.5 2.0
10. Austria 108.6 1.5
Others 724.0 9.9
Total 7 380.7 100
Sources: Bank of Estonia

Estonia's Direct Investment Position abroad by Countries
as of 31 December 2004

Country million EUR % of total
1. Lithuania 404.7 38.9
2. Latvia 340.1 32.7
3. Cyprus 116.5 11.2
4. Finland 48.8 4.7
5. Russia 43.4 4.2
6. Italy 33.2 3.2
7. Ukraine 28.2 2.7
8. Portugal 5.2 0.5
9. Poland 4.7 0.5
10. Kazakhstan 3.6 0.3
Others 11.8 1.1
Total 1 040.2 100
Sources: Bank of Estonia

Telecommunications and IT

12/2000 12/2001 12/2002 12/2003 12/2004
Telephone main (fixed) lines per 100 inhabitants 35.9 34.9 34.2 32.8 32.9
Share of digital lines (%) 71.2 71.8 76.9 79.3 83
Number of mobile phone subscribers per 100 inhabitants 40.8 54 65 77 93
Sources: National Communications Board
  • 55 per cent of population are Internet users (TNS EMOR, Summer 2005)
  • 40 per cent of the households have a computer at home, 81 per cent of home computers are connected to the Internet (E-Track Survey, TNS EMOR, Autumn 2005)
  • All Estonian schools are connected to the Internet
  • There are over 700 Public Internet Access Points in Estonia, 51 per 100 000 people (one of the highest numbers in Europe)
  • Incomes can be declared to the Tax Board via Internet
  • Expenditures made in state budget can be followed on the Internet in real-time
  • The Government has changed Cabinet meetings to paperless sessions using a web-based document system
  • 72 per cent of Estonian people conduct their everyday banking via Internet
  • 93 per cent (National Communications Board, Spring 2005) of the population are mobile phone subscribers
  • All of Estonia is covered with digital mobile phone networks
  • There are more than 600 free wireless Internet zones around the country. More information: www.wifi.ee

With its policies and innovative initiatives the Estonian Government is helping companies make the information technology sector one of the fastest growing in the country. Research undertaken by the World Economic Forum on the use of Information technology in 117 countries (The Global Information Technology Report 2005-2006 - The Network Readiness of Nations, also indicates a strong Estonian standing in government and the community readiness to participate in and benefit from ICT developments. Estonia leads for the 2nd year the Central and Eastern European countries with a rank of 20 (out of 117), thanks to its regulatory framework for ICT.


Economic Development Perspectives

Growth and associated factors 2004-2009

Main economic indicators 2004 2005* 2006* 2007* 2008* 2009*
GDP real growth 7.8 6.5 6.6 6.3 6.3 6.3
GDP (billion EUR) 9.0 10.0 10.9 11.9 13.1 14.3
GDP deflator 3.1 3.7 2.8 2.7 2.8 2.8
Consumer price index 3.0 3.6 2.6 2.6 2.8 2.8
Employment (15–74 years old, thousands) 595.5 599.1 603.0 600.1 612.1 614.7
Employment growth 0.2 0.6 0.6 0.8 0.7 0.4
Productivity growth (per employee) 7.3 5.7 5.9 5.5 5.6 5.8
Unemployment rate (ILO) 9.7 9.3 9.2 8.8 8.5 8.4
Average wage (EUR) 466 513 555 599 647 699
Wage real growth 5.2 6.2 5.5 5.3 5.1 5.0
Investments and inventories (% of GDP) 31.2 30.9 30.4 30.0 29.5 29.0
Current account (% of GDP) -12.5 -10.4 -9.6 -0.6 -7.4 -6.0
* Forecast;
Source: Ministry of Finance, August 2005, Statistical Office of Estonia

A comparison of economic forecasts from various institutions 2005-2006

Economic growth,% Consumer price index, % Current account,
% of GDP
2005 2006 2005 2006 2005 2006
IMF 6.0 5.5 3.7 2.7 -11 -9.7
European Commission 6.0 6.2 3.3* 2.7* -12.1 -11.2
Bank of Estonia 5.7 6.2 3.4* 2.7* -11.3 -10.9
Ministry of Finance 6.5 6.6 3.6 2.6 -10.4 -9.6
*Harmonised consumer price index
Source: Ministry of Finance, European Commission, Bank of Estonia, IMF


More about Estonia's economy:

Bank of Estonia
Statistical Office of Estonia
Estonian Chamber of Commerce and Industry
Ministry of Finance
Ministry of Economic Affairs and Communications
Tallinn Stock Exchange
Estonian business information gateway
Enterprise Estonia
Enterprise Estonia (Investor Services)
Enterprise Estonia (Trade Promotion Services)
Estonian Trade Council
Estonian Business Association
Transformations in the Estonian economy



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