Europe

Estonia
Last reviewed: 31 March 2009

Country information

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ECONOMY

Basic Economic Facts (Source: Estonian Ministry of Finance (www.fin.ee) & Statistical Office of Estonia (www.stat.ee)
GDP: €15.9b (2008)
GDP per capita: €11,833 (2008)
Annual Growth: -3.6% (2008), -9.7% (Q4 2008)
Inflation: 10.4% (2008), 3.4% (Febuary 2009 y-o-y)
Unemployment: 4.5% (2008), 7.6% (Q4 2008)
Major Industries: Timber, food processing, machine production
Major trading partners: Finland, Sweden, German, Latvia, Russia

Further information about Estonia's economy can be found at UK Trade & Investment Country Profile: Estonia

Of the countries formerly in the Soviet Union, Estonia has made some of the most remarkable progress in its move to a liberal market economy. Following independence, Estonia followed an open market policy, with little or no trade barriers, which saw sustained levels of growth, averaging around 4-5% a year. After EU accession in May 2004, growth accelerated to around 10%. The economic boom was fuelled by low interest rates and constrained by the limited workforce, driving up consumer prices and wage inflation. Following the few years of rapid pace of convergence to the old EU MS the need for structural changes to the economy became evident in 2007. The small and flexible Estonian economy started its adjustment, which was interrupted by the global economic crisis. In 2008 the economy went into recession. Bank of Estonia believes the country has the prerequisites for being among the first ones to exit the crisis. This will depend on the speed of further adjustments to the economy and the recovery of the main export markets.