Estonia overview


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%

GDP growth slowed down to 3.9 per cent in Estonia in 2018. Household consumption was the key contributor to growth, underpinned by rising disposable incomes, to some extent supported by a substantial rise in the tax-free threshold for personal income tax in 2018. Investment growth decreased somewhat but remained robust, aided by increasing construction of residential buildings amid buoyant labour markets and favourable lending
conditions for households. As Estonia’s main trading partners, particularly in the Nordic region, see falling growth rates, the economic expansion in Estonia is also likely to lose speed.
Besides, labour shortages remain one of the largest problems for Estonian companies, and for the less productive ones a further wage increase may translate into a damaging loss of competitiveness. While domestic demand will likely remain the main driver of growth in the short-term, the uncertainty related to global developments constitutes a key negative risk.
We anticipate GDP growth to slow down to 3.2 per cent and 2.6 per cent in 2019 and 2020, respectively.

Estonia in the EBRD’s 2018-19 Transition Report

Estonia in the latest BEEPs survey