A town in Estonia

Estonia Economic Forecast

Estonia Economic Outlook

GDP contracted at a slower annual pace in Q2 and less than initially reported, as stronger public spending supported activity. In contrast, the decline in private consumption tripled from Q1 and was the steepest in three years amid higher interest rates. Fixed investment also deteriorated at a quicker pace, further dragging on growth. Meanwhile, exports declined steadily in Q2, but a larger contraction in imports led to a less downbeat external-sector performance. Turning to Q3, GDP will likely shrink year on year for the fifth consecutive quarter, but by less than in Q2. The industrial sector’s downturn softened in July, and inflation fell to an over-two-year low in August, abating some pressure on household budgets. Nevertheless, headwinds to activity remained strong: In July, merchandise exports fell at the sharpest pace since 2009, and retail sales grew by less than in Q2.

Estonia Inflation

Harmonized inflation plunged to 4.3% in August from 6.2% in July on a steeper fall in housing and utilities prices. Average inflation will broadly halve this year from 2022 on softer domestic demand and higher interest rates. Looser-than-expected fiscal policy and volatile energy prices pose upside risks.

This chart displays Economic Growth (GDP, annual variation in %) for Estonia from 2013 to 2022.

Estonia Economic Data

2018 2019 2020 2021 2022
Population (million) 1.3 1.3 1.3 1.3 1.3
GDP (USD bn) 30.6 31.3 31.3 36.8 37.9
GDP per capita (USD) 23,144 23,577 23,511 27,682 28,417
GDP (EUR bn) 25.9 28.0 27.4 31.2 36.0
GDP per capita (EUR) 19,616 21,063 20,624 23,418 27,035
Economic Growth (Nominal GDP, ann. var. %) 8.8 7.8 -1.9 13.6 15.5
Economic Growth (GDP, ann. var. %) 3.8 4.0 -1.0 7.2 -0.5
Domestic Demand (ann. var. %) 6.1 3.1 3.4 9.7 0.9
Private Consumption (ann. var. %) 4.7 4.6 -1.5 9.3 2.3
Government Consumption (ann. var. %) 1.1 3.2 3.0 3.8 0.1
Fixed Investment (ann. var. %) 10.5 6.2 10.7 7.3 -3.7
Exports (G&S, ann. var. %) 2.9 5.0 -5.5 22.1 3.0
Imports (G&S, ann. var. %) 5.9 3.7 1.3 23.2 3.2
Industrial Production (ann. var. %) 4.8 6.9 -3.0 13.3 -2.1
Retail Sales (ann. var. %) 6.7 5.7 -4.3 18.1 18.0
Wages (ann. var. %) 7.6 7.5 2.9 1.7 11.6
Unemployment (% of active population, aop) 5.4 4.5 6.9 6.2 5.6
Fiscal Balance (% of GDP) -0.6 0.1 -5.5 -2.4 -0.9
Public Debt (% of GDP) 8.2 8.5 18.5 17.6 18.4
Money (ann. var. of M2 %) 10.5 9.5 19.4 20.2 1.1
Inflation (CPI, ann. var. %, eop) 3.4 1.8 -0.8 12.2 17.6
Inflation (HICP, ann. var. %, eop) 3.3 1.8 -0.9 12.0 17.5
Inflation (HICP, ann. var. %, aop) 3.4 2.3 -0.6 4.5 19.4
Inflation (PPI, ann. var. %, aop) 2.6 -0.2 -2.4 12.4 26.8
ECB Refinancing Rate (%, eop) 0.00 0.00 0.00 0.00 2.50
ECB Overnight Deposit Rate (%, eop) -0.40 -0.50 -0.50 -0.50 2.00
3-Month EURIBOR (%, eop) -0.31 -0.38 -0.55 -0.57 2.13
Exchange Rate (USD per EUR, eop) 1.14 1.12 1.22 1.14 1.07
Exchange Rate (USD per EUR, aop) 1.18 1.12 1.14 1.18 1.05
Current Account Balance (EUR bn) 0.2 0.7 -0.5 -0.8 -1.2
Current Account Balance (% of GDP) 0.9 2.5 -1.9 -2.6 -3.2
Merchandise Trade Balance (EUR bn) -1.2 -0.9 -0.3 -1.3 -2.6
Merchandise Exports (EUR bn) 12.6 13.3 13.3 16.4 20.1
Merchandise Imports (EUR bn) 13.8 14.2 13.5 17.7 22.7
Merchandise Exports (ann. var. %) 5.3 5.8 -0.4 23.7 22.7
Merchandise Imports (ann. var. %) 7.4 3.1 -4.9 30.5 28.5
Foreign Direct Investment (EUR bn) 1.2 2.7 2.8 -0.7 1.1

Free Sample Report

Interested in Estonia economic reports, analysis and data? FocusEconomics provides data, forecasts and analysis for hundreds of countries and commodities. Request your free sample report now.

Close Left Media Arrows Left Media Circles Right Media Arrows Right Media Circles Arrow Quote Wave Address Email Telephone Man in front of screen with line chart Document with bar chart and magnifying glass Application window with bar chart Target with arrow Line Chart Stopwatch Globe with arrows Document with bar chart in front of screen Bar chart with magnifying glass and dollar sign Lightbulb Document with bookmark Laptop with download icon Calendar Icon Nav Menu Arrow Arrow Right Long Icon Arrow Right Icon Chevron Right Icon Chevron Left Icon Briefcase Icon Linkedin In Icon Full Linkedin Icon Filter Facebook Linkedin Twitter Pinterest