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 2018 3.6%
Current EBRD forecast for Estonia’s real GDP growth in 2019 3.0%
Following the investment-led strong GDP growth recovery of 4.9 per cent in 2017, economic growth in Estonia slowed down to 3.5 per cent year-on-year in the first half of 2018. This growth deceleration has been largely induced by poor corporate investment, which was only marginally offset by higher investment expenditures of the public sector and households.
At the same time, private consumption accelerated, presumably as the positive impact of the higher personal income tax exemption introduced in 2018 started to take effect earlier than expected.
The favourable external environment has helped exports, but its positive net effect on GDP was effectively offset by the strong growth in domestic demand-driven imports.
Economic growth is expected to decelerate to 3.6 per cent in 2018 and further to 3.0 per cent in 2019.
Labour shortages have been increasingly seen as a major constraint on business investment and exports, in particular in relatively less productive sectors. In contrast, rising wages will likely further underpin strong household consumption, which will be only fractionally offset by the expected rise in inflation.