Estonia

Capital: Tallinn

Local time:
It is %T:%M %A in Tallinn

Exchange rate on :

GDP growth rate: 3.260% in 2012

FDI inward stock: 16 594 million USD in 2007

Country risk: See the country risk analysis from Estonia provided by Ducroire.

Economic trends

Estonia, which became a member of the European Union on May 1^st, 2004, is an attractive investment destination on the Baltic Sea (one of the fastest growing European markets in recent years), with a sound economy. A balanced budget (guaranteed by constitution), free trade regime, fully exchangeable currency, competitive commercial banking sector, and a foreign investment-friendly environment have made the country's success.
However, the country's economic situation, which was amongst the Baltic "tigers", has recently deteriorated. The 2008-2009 economic and financial crisis has deeply affected the country, resulting mainly in a lack of liquidity, a damaged real estate market, high exchange rates and a very high unemployment rate (more than 15% of the active population in June 2009). Estonia's economic activity diminished by 10% in the first quarter of 2008 and the country went into recession in 2009. Estonia's GDP dropped by more than 9% over recent months, making this the most significant drop in the whole of Europe.

Main branches of industry

The main industrial sectors of Estonia are the food industry (dairy products and meat processing), which account for 16% of the manufacturing industry, electronics (a traditional sector), chemical industry (it accounts for 6% of the manufacturing industry), wood processing industry (wood processing accounts for 24% of the manufacturing industry), transport and logistics, biotechnology, financial services and construction.
The Estonian industrial sector was heavily affected by the 2008-2009 economic crisis and domestic and foreign demand were considerably reduced.

International trade

Despite the international economic crisis, foreign trade's contribution to the GDP was positive in 2008-2009, at around 7%. In effect, exports continued to increase whereas imports decreased due to a reduction in domestic demand.  
European Union countries account for 70% of Estonia's foreign trade and CIS countries account for 11% of the total exports. Finland and Sweden, together with the European Union and Russia, are the main trading partners of Estonia. Main export goods are electrical and electronic equipment, wood and mineral products, metals, agricultural and food industry products, transport equipment, raw materials and textiles. Estonia mainly imports electric & electronic equipment, machinery, vehicles, mineral fuels (oil), iron and steel.