An overview of Estonia

Some key economic numbers

An economic overview:

In spite of the rapid economic growth of the last 5-6 years, Estonia is less than half as wealthy as the Western European countries. 

 Estonians earn about ½ of the European average income, although the economic growth during the recent years has been very fast and the differences have been disappearing. Although a tumultuous period of economic reforms is now over, the changes that Estonia is presently going through are far more dramatic than those in the developed countries. The privatisation has been completed in Estonia and the rules governing the economy resemble those of the Western Europe. Calmer times have brought about a more balanced economic development – great crises and upheavals are now history – and quite a moderate increase in prices. 

 The Estonian economy is multifaceted – industry and transport as well as commerce and different branches of services are equally important. Due to the available natural resources Estonian economy bases largely on the branches related to the forest resources; Estonian energy sector is based on oil shale, a resource quite rare elsewhere in the world. Finland and Sweden are Estonia's most important trade partners. The Estonian economy profits significantly from the business generated by more than 2 million tourists a year, the majority of whom come from Finland. 

 Economic reforms and swift changes brought about an increase in unemployment in the 1990ies, no matter that lots of people left Estonia during the first years of independence (in the period between the population polls of 1989 and 2000 the population of Estonia decreased by at least 194 thousand people, which is 12% approximately). By now the situation has started to improve and the unemployment has decreased to 10% and the number of the employed is increasing. Due to the rise in productivity and occasional shortage of specialists in certain areas, salary rise is quite marked as well. 

  In general, Estonian governments have been leading a balanced policy thanks to which the state budget has been more or less balanced, during the recent years the actual tax revenue has notably exceeded the expenditure, therefore the state loan burden is really modest. 

   Since June 1992 the official currency in Estonia is the kroon, the rate of which was fixed to the German mark (1 mark = 8 kroons). After the introduction of the euro the kroon is tied to the euro (at a rate of approximately 15,645 kroons). The successful monetary reform also meant swift changes in banking and in the financial sector as a whole; still, the local financial sector is small. Banking in Estonia is characterised by a widespread use of the IT technologies – the majority of the people own payment cards, internet banking has spread in no time, no to mention the latest development - the m-payments (mobile payments). 

Some other useful links

The official Estonia web centre - contains maps and other details on Estonia.

http://www.riik.ee/en/

The EU Enlargement site that shows lots of useful information on Estonia

http://europa.eu.int/comm/enlargement/estonia/

The official site of London University and it offers a wide range of links to interesting sites.

http://www.ssees.ac.uk/estonia.htm#economics