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Estonia Economic Snapshot

Going for Growth 2021 - Estonia

The top policy priority is to recover strong labour market performance while preparing the workforce for greater use of digital technologies and low-carbon economic growth. Unemployment is expected to remain higher than before the pandemic and several categories of workers risk losing attachment to the labour market.

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2021 Structural Reform Priorities

  • Labour market: In the wake of the crisis, activation and training are essential to maintain inclusiveness, particularly for the low skilled
  • R&D and digitalisation: Boost digital infrastructure to promote business connectivity and dynamism
  • Energy: Improve energy efficiency to reduce high CO2 emissions
  • Tax system: Tilt taxation away from labour to spur an inclusive recovery
  • Competition and regulation: Reducing the stringency of the insolvency regime to promote a quicker recovery and efficient reallocation of resources

 

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Economic Forecast Summary (December 2020)

With a milder contraction than initially feared, GDP is set to fall by 4.7% in 2020, before rebounding by 3.4% in 2021 and 3.3% in 2022. Consumption is expected to strengthen as households regain confidence and draw down large savings set aside at the peak of the pandemic. Investment will also regain momentum on the back of improved expectations for industrial production, exports and the services sector. Inflation will remain subdued in 2021 before stabilising somewhat above 2%.

The various employment support measures put in place have helped to cushion the hit to the labour market, but unemployment is expected to remain well above its pre-crisis level in the next two years. As a result, the large group of low-skilled workers recently integrated in the labour market may have difficulties finding new jobs. Interventions should be maintained as long as unemployment remains high, while training and active labour market policies should be strengthened to avoid losing the social benefits of reforms made in recent years.

Economic Survey of Estonia (December 2019)

Estonia ranks already among the top countries in e-government.  Citizens can do basically anything online except for a very few things like getting married or divorced and selling or buying real estate. The X-road, the secure communication protocol underlying e-government services, was built on the same principles as the block chain, even before the word block chain was invented. 

Executive Summary

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