Estonia Economic Forecast

Estonia Economic Outlook

September 28, 2021

Economic growth gained considerable steam in Q2, with activity surpassing pre-pandemic levels, with improvements in both private consumption and fixed investment leading the uptick. That said, the result was supported by a favorable base effect. Moving on to Q3, available data is mixed: Both economic and consumer sentiment improved from Q2’s average in July–August, but both retail sales and industrial production lost steam in July. In other news, Fitch Ratings affirmed Estonia’s AA- rating with a stable outlook on 3 September, highlighting the country’s sound public finances but warning against its fragility to external shocks. Meanwhile, on 23 September the government approved the outlined state budget for 2022, which sees the deficit falling to less than 3% of GDP. The draft budget must be sent to parliament for approval by the end of September.

Estonia Economic Growth

After robust activity sees economic growth return to its pre-pandemic level in 2021, momentum should remain upbeat in 2022. Although the base effect will fade, growth will be fueled by incoming EU funds, together with falling unemployment and growing wages. That said, uncertainty regarding the pandemic and border tensions with neighboring Belarus pose downside risks. FocusEconomics analysts see the economy growing 7.2% in 2021 and 4.4% in 2022, which is up 0.1 percentage points from last month’s forecast.

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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