Estonia Economic Forecast

Estonia Economic Outlook

December 23, 2021

After returning to pre-pandemic levels in Q2, the economy lost steam in Q3, partly due to a less favorable base effect. Looking at the details of the release, private consumption and exports lost momentum, while fixed investment slumped into contraction. Moving into the fourth quarter, available data points to a slowdown in activity at the start of the period amid rising Covid-19 infection rates, with new daily cases peaking in early November. Industrial production slowed in October, while retail sales waned in the same month. Meanwhile, both consumer and business sentiment deteriorated in October–November, boding ill for consumption and investment in the quarter. In other news, on 9 December the government approved a EUR 70 increase in the minimum wage to EUR 654 per month. This will come into effect in 2022, and bodes well for consumption in the coming year.

Estonia Economic Growth

After a likely healthy expansion this year, economic growth should carry over into 2022. Although the base effect will fade, EU funds, combined with lower unemployment and higher wages—aided by the sizable increase in the minimum wage—should boost activity. That said, uncertainty regarding the pandemic and increasing tensions with neighboring Belarus cloud the outlook. FocusEconomics analysts see the economy growing 4.2% in 2022, which is down 0.1 percentage points from last month’s forecast and 3.6% in 2023.

Estonia Economy Data

2015 2016 2017 2018 2019
Population (million)
GDP per capita (EUR)15,80416,48518,05319,73921,257
GDP (EUR bn)20.821.723.826.028.0
Economic Growth (GDP, annual variation in %)
Consumption (annual variation in %)
Investment (annual variation in %)-3.20.812.51.713.4
Industrial Production (annual variation in %)
Retail Sales (annual variation in %)
Unemployment Rate-  -  -  -  -  
Fiscal Balance (% of GDP)0.1-0.5-0.8-0.6-0.3
Public Debt (% of GDP)
Money (annual variation in %)
Inflation Rate (CPI, annual variation in %, eop)-
Inflation Rate (HICP, annual variation in %)
Inflation (PPI, annual variation in %)-2.0-
Policy Interest Rate (%)-  -  -  -  -  
Exchange Rate (vs USD)-  -  -  -  -  
Exchange Rate (vs USD, aop)
Current Account (% of GDP)
Current Account Balance (EUR bn)
Trade Balance (EUR billion)-0.9-0.8-0.8-1.0-0.8
Exports (EUR billion)10.711.312.012.713.4
Imports (EUR billion)11.612.012.913.714.2
Exports (annual variation in %)-
Imports (annual variation in %)-

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Estonia Facts

Value Change Date
Exchange Rate1.120.65 %Dec 31

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