Estonia overview

Cityscape

In Estonia we focus on:

Supporting investments in energy efficiency and renewable energy. Supporting energy efficiency investments particularly in industrial companies as well as investments in renewable energy generation continue to be the EBRDs key priorities in Estonia.

Improving the competitiveness of the export sector. To assist in improving exporting enterprises competitiveness through increased usage of advanced technology and to invest in equity and mezzanine funds in order to facilitate further development of the SME sector.

Supporting cross-border investments by Estonian companies, particularly in the EBRD’s region of operations, to enable Estonian firms to establish a foothold in foreign markets and benefit from efficiencies that access to larger markets would bring.

Estonia is a supporter of the Eastern Europe Energy Efficiency and Environment Partnership Fund and in 2015 provided grants totalling €40,000 for projects in Moldova and €30,000 for projects in Georgia.

The EBRD’s latest strategy for Estonia was adopted on 10 February 2016

Current EBRD forecast for Estonia’s real GDP growth in 2019 3.2%
Current EBRD forecast for Estonia’s real GDP growth in 2020 2.6%

Buoyant growth in Estonia’s GDP is starting to face capacity constraints. Nominal wage growth reached an average of almost 8.0 per cent year on year in the first half of 2019, causing unit labour costs to grow faster than labour productivity. This reflects a shrinking labour market and raises concerns about Estonia’s future competitiveness.
 
While consumption stayed strong in 2018, an increasing part of demand was directed towards imports, resulting in growth deceleration to 4.8 per cent. In the first half of 2019, moderating household consumption slowed growth further, to 4.2 per cent year on year. However, these remain impressive numbers and short-term GDP growth will remain robust, at 3.2 per cent and 2.6 per cent in 2019 and 2020 respectively.
 
Negative risks to the outlook come from the intensification of trade tensions and from weaker export demand in advanced economies, especially in the Nordic region.
 

Estonia in the EBRD’s 2018-19 Transition Report

Estonia in the latest BEEPs survey