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Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline

Economic Indicators

Estonia became a member of the European Union on May 1st, 2004 and remains the only former Soviet country invited to join the OECD to this day (May 2010). Estonia has managed to move from a state-run and centralized economy to a dynamic market economy, liberalize by a succession of governments observing a strict budgetary orthodoxy while simultaneously modernizing the country.  The country has stands out mainly thanks to its IT sector (the invention of Skype, mobile payment systems, internet voting, multifunctional electronic identity cards and initiatives in the sphere of cyber security).

As the so-called "Baltic Tiger," Estonia experienced an average annual growth of more than 8% in 2000-2007. The strong demand was supported by the large amount of foreign investment, rising wages and strong growth in household debt. This rapid rise in living standards was accompanied by a significant reduction of unemployment (4% in July 2008).

However, due to its dependency on foreign investment, the country was hit hard by the recession (-5.1% of GDP in 2008 and -14% in 2009) , which resulted in a lack of liquidity, damaged real estate market, rising exchange rates and a spike in unemployment (more than 15% of the workforce in June 2009). During the same yera, the average salary dropped by almost 5%.

After two years of very deep recession, in 2010 the growth became again strong and healthy. This trend continued and intensified in 2011, with a growth rate of more than 6.5%. The crisis has nonetheless left behind a high rate of unemployment (11.3% in 2011), which is however declining. Estonia is considered one of the most liberal economies in the world by the Heritage Foundation's 2010 Economic Freedom Index.

 
Main Indicators 2009201020112012 (e)2013 (e)
GDP (billions USD) 19.32e19.25e22.5423.9025.01
GDP (Constant Prices, Annual % Change) -13.9e3.1e6.54.04.2
GDP per Capita (USD) 14,410e14,40516,88017,90818,753
General Government Gross Debt (in % of GDP) 7.2e6.66.0e5.65.3
Inflation Rate (%) -0.12.95.1e3.52.5
Unemployment Rate (% of the Labor Force) 13.816.913.511.59.5
Current Account (billions USD) 0.880.690.550.550.18
Current Account (in % of GDP) 4.53.6e2.40.7-

Source: IMF - World Economic Outlook Database ; World Bank , Last Available Data

Note: (e) Estimated Data

Main Sectors of Industry

Agriculture accounts for only 2.7% of the GDP and employs 3% of the active population.

The industrial sector, which represents 26.3% of the GDP, employs 33% of Estonian workers. The main industrial sectors of Estonia are the food industry (dairy products and meat processing), which accounts for 16% of the manufacturing industry, electronics (a traditional sector), chemical industry (which accounts for 6% of the manufacturing industry) and wood processing industry (this sector accounts for 24% of the manufacturing industry). The Estonian industrial sector was heavily affected by the economic crisis in 2008-2009 (-26.5%) and domestic and foreign demand were considerably reduced.

The services sector is the most developed, in particular transport and logistics, biotechnology and financial services. The sector accounts for 71% of the GDP employing 60% of the Estonian population. The telecommunications sector is the most performing one, Estonia has even acquired the nickname of E-stonia for its advanced progress in equipment and Internet research and development.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 4.0 31.3 64.1
Value Added (in % of GDP) 2.9 29.1 68.0
Value Added (Annual % Change) 5.7 -4.8 -0.4

Source: World Bank - Last Available Data.

 

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Monetary Indicators 20062007200820092010
Euro (EUR) - Average Annual Exchange Rate For 1 USD 12.4711.4310.6911.2611.81

Source: World Bank - Last Available Data.

 

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Learn more about Market Analyses about Estonia on Globaltrade.net, the Directory for International Trade Service Providers.
 

Indicator of Economic Freedom

Score:
75.2/100
Position:
Mostly free
World Rank:
14/179
Regional Rank:
5/42

Distribution of Economic freedom in the world
Source: 2011 Index of Economic freedom, Heritage Foundation

Note: The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labor freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.

 

Country Risk

See the Country Risk Analysis Provided By Ducroire.

 

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Foreign Trade in Figures

Despite the international economic crisis of 2008-2009, foreign trade's contribution to the GDP represents more than 150%. Rich in oil shale, a large part of Estonia's energy production is based on this resource (80%), which allows it to be energetically self-sufficient. Estonia is a net exporter of electricity, especially to Finland, Latvia and Lithuania.

The European Union countries account for 70% of Estonia's foreign trade and the CIS countries account for 11% of the total exports. The main export trading partners of Estonia are: Finland, Sweden, Russia, other Baltic states, Germany and the United States. The main export goods are electrical and electronic equipment, wood and mineral products, metals, agricultural and food industry products, transport equipment, raw materials, textiles and electricity.

Its main import partners are: Finland, Lithuania, Latvia, Germany, Sweden, Russia and Poland. Estonia mainly imports electric & electronic equipment, machinery, vehicles, mineral fuels (oil), iron and steel.

 
Foreign Trade Indicators 20072008200920102011
Imports of Goods (million USD) 15,67716,02710,13912,28417,579
Exports of Goods (million USD) 11,01012,4539,04011,59616,760
Imports of Services (million USD) 3,0223,3032,4832,7653,711
Exports of Services (million USD) 4,3225,0944,3434,4895,489
Imports of Goods and Services (Annual % Change) 7.8-7.0-32.68.8-
Exports of Goods and Services (Annual % Change) 1.50.4-18.710.7-
Imports of Goods and Services (in % of GDP) 79.175.859.172.2-
Exports of Goods and Services (in % of GDP) 68.471.665.378.3-
Trade Balance (million USD) -3,619-3,124-775-331-
Trade Balance (Including Service) (million USD) -2,189-1,2951,1241,399-
Foreign Trade (in % of GDP) 147.6147.4124.4150.6-

Source: WTO - World Trade Organization ; World Bank , Last Available Data

 

Main Partner Countries

Main Customers
(% of Exports)
2011
Russia 15.7%
Sweden 14.3%
Finland 13.7%
Latvia 7.2%
United States 6.6%
See More Countries 42.5%
Main Suppliers
(% of Imports)
2011
Russia 11.3%
Germany 9.2%
Finland 9.1%
Sweden 7.8%
China 7.4%
See More Countries 55.2%

Source: Comtrade, Last Available Data

 

Main Products

Main Exports
(% of Exports)
2011
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals 14.3%
Electrical apparatus for line telephony or line...Electrical apparatus for line telephony or line telegraphy, incl. line telephone sets with cordless handsets and telecommunication apparatus for carrier-current line systems or for digital line systems; videophones; parts thereof 9.8%
Insulated "incl. enamelled or anodised" wire,...Insulated "incl. enamelled or anodised" wire, cable "incl. coaxial cable" and other insulated electric conductors, whether or not fitted with connectors; optical fibre cables, made-up of individually sheathed fibres, whether or not assembled with electric conductors or fitted with connectors 2.2%
Motor cars and other motor vehicles principally...Motor cars and other motor vehicles principally designed for the transport of persons, incl. station wagons and racing cars (excl. motor vehicles of heading 8702) 1.8%
Electrical energyElectrical energy 1.8%
See More Products 70.0%
Main Imports
(% of Imports)
2011
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals 15.1%
Electrical apparatus for line telephony or line...Electrical apparatus for line telephony or line telegraphy, incl. line telephone sets with cordless handsets and telecommunication apparatus for carrier-current line systems or for digital line systems; videophones; parts thereof 5.9%
Motor cars and other motor vehicles principally...Motor cars and other motor vehicles principally designed for the transport of persons, incl. station wagons and racing cars (excl. motor vehicles of heading 8702) 3.2%
Electronic integrated circuits and microassembliesElectronic integrated circuits and microassemblies 1.7%
Medicaments consisting of mixed or unmixed...Medicaments consisting of mixed or unmixed products for therapeutic or prophylactic uses, put up in measured doses "incl. those in the form of transdermal administration" or in forms or packings for retail sale (excl. goods of heading 3002, 3005 or 3006) 1.5%
See More Products 72.7%

Source: Comtrade, Last Available Data

 
 

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Sources of General Economic Information

Ministries
Ministry of Economic Affairs and Communication
Ministry of Finance
Statistical Office
Estonian Statistics
Central Bank
Central Bank of Estonia
Stock Exchange
Tallin Stock Exchange
Search Engines
Estonia Wide Web
Google
Neti
Economic Portals
Estonian Business portal
The Baltic Times

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Political Outline

Executive Power
The President is the chief of the state and is elected by parliament for a five-year term. The President is the commander-in-chief of the armed forces. He/she nominates the Prime Minister after approval by parliament (generally leader of the majority party or coalition), for a 4 year term. Prime Minister is the head of the government and also holds the executive powers which include implementation of the law in the country and running the day-to-day affairs. The Council of Ministers is appointed by the Prime Minister, approved by parliament.
Legislative Power
The legislature in Estonia is unicameral. The parliament called State Assembly has 101 seats with its members elected by popular vote to serve four-year terms. The State Assembly is the highest organ of statal authority. It initiates and approves legislation sponsored by the Prime Minister. The government is directly or indirectly dependent on the support of the parliament, often expressed through a vote of confidence. The government cannot dissolve the parliament but can recommend the same to President who has to take parliament into confidence before taking a decision.The citizens of Estonia enjoy considerable political rights. Estonia is among the world's leaders in e-governance and features an impressively transparent system in which government decisions are almost instantly made available on the Internet.
The Judiciary is independent in Estonia, and generally free from government influence. The main source of the law is the Constitution of June 1992. The legal system is based on civil law system. No judicial review of legislative acts takes place in the country. Estonia being a member of the European Union, the national law in the country needs to comply with the conditions of the Community legislation. Estonia accepts compulsory ICJ jurisdiction, but with reservations.
Main Political Parties
Estonia has a multi-party system, with numerous parties in which no party often has a chance of gaining power alone, and thus parties must work with each other to form coalition governments. The major parties in the country are:
- Estonian Centre Party (this party has been represented in all five assemblies after Estonia regained its independence)
- Union of Pro Patria and Res Publica (it is a right-wing conservative party),
- Estonian Reform Party (it is made up of 31 members at the parliament and is the largest faction represented; it promotes liberal values)
- People's Union of Estonia (this party bases its value on patriotism, education and family).

For some information about political parties, the following website of the Parliament should be visited: http://www.riigikogu.ee.

Current Political Leaders
President: Toomas Hendrik ILVES (since October 2006)
Prime Minister: Andrus ANSIP (since April 2007)
Next Election Dates
Presidential: September 2016
State Assembly: Year 2011
 

Indicator of Freedom of the Press

World Rank:
3/179
Evolution:
6 places up compared to 2010

Source: Worldwide Press Freedom Index 2011, Reporters Without Borders

Note: The world rankings, published annually, measures the violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position is assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire sent to partner organizations,150 RWB correspondents, journalists, researchers, jurists and activists of human rights, including the main criteria - 44 in total - to assess the situation of press freedom in a given country. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).

 

Indicator of Political Freedom

Ranking:
Free
Political Freedom:
1/7
Civil Liberties:
1/7

Map of freedom 2010
Source: Freedom House

Note: The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.

 

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