Country Forecast Estonia 3rd Quarter 2015

Country Forecast Estonia 3rd Quarter 2015

Policy towards private enterprise and competition

2015-16: The government presses ahead with the break-up of Eesti Gaas (Estonian Gas) into separate distribution and supply operations. The gas network is merged with Elering, the state-owned electric power-transmission operator.

2017-19: Limited further privatisation. The government may take the gas-supply network into state ownership after it is split from Eesti Gaas. Gradual strengthening of research and innovation rules to boost and broaden private R&D investment.

Policy towards foreign investment

2015-16: Heightened regional tensions with Russia constrain inward-investment activity.

2017-19: Hostility to prospective Russian investors remains high. Focus on attracting investment in higher value-added sectors.

Foreign trade and exchange controls

2015-16: Foreign trade governed by EU rules. Impact of EU-Russia sanctions continues to hit export activity.

2017-19: Gradual shift in export base towards goods and services of higher value-added.


2015-16: Reduction in corporate-tax rate to 20% (from 21%) in January 2015. Businesses continue to face taxation of distributed profits only. Reduction in uniform personal-income tax rate to 20% (from 21%) and rise in personal allowance in January 2015.

2017-19: Focus on reducing high labour-tax wedge via planned reduction in employer social-security contributions and a further rise in personal income-tax allowance. Offsetting revenue-raising measures will include VAT changes and higher fuel, tobacco and excise duties.


2015-16: Gradual turnaround in regional credit cycle and euro zone membership should support modest up-tick in lending growth, but stricter lending conditions and greater risk aversion will constrain overall activity.

2017-19: Economic convergence reduces interest-rate spreads with the rest of the euro zone, but lending criteria remain tight.

The labour market

2015-16: Gradual fall in headline unemployment, but structural flaws in labour market and declining working-age population will lead to rising business concerns about skills shortages and wage pressures in some sectors. Modest strengthening of work incentives.

2017-19: Businesses press for a less restrictive attitude on immigration as shortages of skilled labour persist.


2015-16: Limited fiscal scope to boost infrastructure investment, but access to EU structural funds improves. Construction begins on third electricity interconnection, reflecting efforts to reduce energy dependence on Russian gas and to strengthen energy-supply security.

2017-19: Agreement with Finland for construction of new liquefied natural gas (LNG) terminal. Focus on reducing high carbon-dioxide emissions. Uncertainty over feasibility and financing of ambitious Rail Baltica project to connect Estonia with trans-European network.

Country Forecast Estonia 3rd Quarter 2015
Estonia--highlights: Political outlook
Estonia--highlights: Demographic outlook
Estonia--highlights: Business environment outlook
Estonia--highlights: Economic outlook
Estonia--highlights: Market opportunities
Estonia--highlights: Long-term outlook
Fact sheet
Political outlook: Political forces at a glance
Political outlook: Political stability
Political outlook: Political and institutional effectiveness
Political outlook: Election watch
Political outlook: Key players to watch
Political outlook: International relations
Demographic assumptions
Business environment outlook: Business environment rankings
Business environment outlook: Estonia's business environment at a glance
Business environment outlook: Macroeconomic environment
Business environment outlook: Policy towards private enterprise and competi
Business environment outlook: Policy towards foreign investment
Business environment outlook: Foreign trade and exchange controls
Business environment outlook: Taxes
Business environment outlook: Financing
Business environment outlook: The labour market
Business environment outlook: Infrastructure
Economic forecast: Policy trends
Economic forecast: Fiscal policy
Economic forecast: Monetary policy
Economic forecast: International assumptions
Economic forecast: Economic growth
Economic forecast: Sectoral trends
Economic forecast: Inflation
Economic forecast: Exchange rates
Economic forecast: External sector
Economic forecast: Foreign direct investment in Estonia
Market opportunities: Market outlook
Long-term outlook: The long-term outlook
Long-term outlook: Methodology for long-term forecasts
Data summary: Global outlook
Data summary: Gross domestic product, current market prices
Data summary: Gross domestic product, at constant prices
Data summary: Gross domestic product by sector of origin
Data summary: Growth and productivity
Data summary: Economic structure, income and market size
Data summary: Fiscal indicators
Data summary: Monetary indicators
Data summary: Employment, wages and prices
Data summary: Current account and terms of trade
Data summary: Foreign direct investment
Data summary: External debt
Data sources and definitions
Guide to the business rankings model
Indicator scores in the business rankings model