Economy at a Glance

19.07.2010

Key Facts

National currency: the kroon, EEK (100 sents = 1 kroon)
Monetary system: modified currency board
Currency peg: 1 EUR = 15.65 EEK
Currency peg and currency board fixed by law since
June 1992 (originally to the German Mark)
Tax system: 21% flat income tax, reinvested corporate profit is tax free; 20% VAT

International Credit Ratings

Moody's: A1, outlook stable
Standard & Poor's: A, outlook stable
Fitch: A, outlook stable

Key Indicators

Key Indicators	2002	2003	2004	2005	2006	2007	2008	2009
Population as of 1 January (million)	1.36*	1.36*	1.35*	1.35*	1.36	1.35	1.34*	1.34
GDP at current prices (billion EUR)	7.7	8.7	9.7	11.2	13.2	15.6	16.0	13.7
Real growth of GDP (%)	7.9	7.6	7.2	9.4	10.0	7.2	-3.6	-14.1
GDP per capita at current prices (EUR)	5 713	6 430	7 168	8 298	9 838	11 641	11 987	10 243
GDP per capita (PPS) (EU-27=100)	49.9	54.5	57.4	61.6	65.1	68.8	67.3	62.0
Annual FDI (million EUR)	306.8	822.2	770.8	2 307.3	1 431.8	1 997.6	1 317.4	1 204.2
FDI stock, as of 31 December (million EUR)	4 035	5 553	7 374	9 539	9 660	11 332	11 648	11 268
FDI stock per capita, as of 31 December (EUR)	2 967	4 083	5 462	7 066	7 155	8 394	8 693	8 409
Consumer price index compared to previous year (%)	3.6	1.3	3.0	4.1	4.4	6.6	10.4	-0.1
Unemployment rate** (%)	10.3	10.0	9.7	7.9	5.9	4.7	5.5	13.8
Average monthly wage (EUR)	393	430	466	516	601	725	825	739
Current account balance (% of GDP)	-10.6	-11.3	-11.3	-10.0	-16.9	-17.8	-9.4	4.6
Deficit (-)/Surplus of state budget (% of GDP)	1.1	2.4	1.7	1.6	2.3	2.6	-2.8	-1.7
Export (billion EUR)***	3.642	4.003	4.769	6.183	7.639	8.021	8.452	6.477
Import (billion EUR)***	5.079	5.715	6.703	8.204	10.564	11.318	10.870	7.308
Trade balance (billion EUR)***	-1.437	-1.712	-1.934	-2.021	-2.925	-3.297	-2.418	-831
Total government expenditures (% of GDP)	35.8	34.8	34.0	33.6	34.0	34.8	39.9	45.4

* Based on the 2000 Population Census
** Unemployed/labour force according to ILO methodology;
*** Trade figures shown in special trade system
(e) Estimated value

Sources: Population Register, Bank of Estonia, Ministry of Finance, Statistical Office of Estonia, Eurostat

GDP by Main Fields of Economic Activity (as a % of total GDP)

Field of Activity	2002	2003	2004	2005	2006	2007	2008	2009
Real estate, renting and business services	18.5	18.7	19.3	20.3	20.0	19.9	20.1	21.2
Manufacturing	18.1	18.1	17.4	17.2	17.0	16.9	16.7	14.5
Wholesale and retail trade; repair of motor vehicles etc.	13.7	14.1	14.2	14.5	15.1	14.5	13.9	13.5
Transport, storage and communication	13.0	12.8	12.6	11.4	11.1	10.4	10.1	10.3
Construction	5.9	5.8	6.0	7.1	8.3	9.1	8.3	6.8
Public administration and defence; compulsory social security	5.8	5.7	5.7	5.4	5.2	5.6	6.4	7.8
Education	4.9	4.8	4.7	4.6	4.3	4.2	4.8	5.5
Financial intermediation	4.2	3.8	3.9	3.6	3.8	4.0	4.0	3.5
Electric electricity, gas and water supply	3.3	3.6	3.5	3.3	3.1	3.0	3.2	3.7
Agriculture and hunting	2.4	2.3	2.3	2.2	2.1	2.2	1.7	1.6

Source: Statistical Office of Estonia

Due to the accession with the European Union, the methodology of macroeconomic statistics changed. The changes concerned the calculation methodology of imputed rent and consumption of fixed capital, and changed also the level of gross domestic product and gross national income in the period 1993–2003.

Main Trade Partners in 2009 as a % of total trade

figures shown in special trade system

Country	Exports	Country	Imports
1. Finland	18.6	1. Finland	14.5
2. Sweden	12.6	2. Lithuania	10.8
3. Latvia	9.5	3. Latvia	10.4
4. Russia	9.3	4. Germany	10.3
5. Germany	6.1	5. Russia	8.8
6. Lithuania	4.8	6. Sweden	8.3
7. USA	4.2	7. Poland	5.6
8. Denmark	3.4	8. Netherlands	3.7
9. Norway	3.2	9. France	2.5
10. Nigeria	2.9	10. Denmark	2.3
Others	25.4	Others	22.8

Main Exports and Imports in 2009 (as a % of total trade)

Main Commodity Groups	Exports	Main Commodity Groups	Imports
Machinery and appliances	19.6	Mineral products	20.1
Mineral products	16.8	Machinery and appliances	19.2
Agricultural products and food preparations	10.0	Agricultural products and food preparations	12.7
Base metals and articles of base metals	8.7	Chemical products	9.4
Wood and articles of wood	8.6	Base metals and articles of base metals	7.7
Miscellaneous manufactured articles	8.3	Transport equipment	6.3
Transport equipment	6.5	Articles of plastics and rubber	5.4
Chemical products	5.5	Textile products	5.3
Textiles and textile articles	4.0	Paper and articles of paper	2.7
Paper and articles of paper	3.3	Wood and articles of wood	2.6
Articles of plastics and rubber	3.1	Miscellaneous manufactured articles	2.5
Others	5.6	Others	6.1

Source: Statistical Office of Estonia

Direct Investment Position in Estonia by Countries

as of 31 December 2009

Country	Million EUR	% of total
1. Sweden	4 470.6	39.7
2. Finland	2 584.9	22.9
3. Netherlands	975.2	8.7
4. Norway	362.7	3.2
5. Russia	344.1	3.1
6. Great Britain	267.8	2.4
7. Cyprus	261.8	2.3
8. Denmark	227.8	2.0
9. Luxembourg	189.3	1.7
10. France	169.2	1.5
Others	1 414.9	12.5
Total	11 268.3	100.0

Source: Bank of Estonia

Estonia's Direct Investment Position abroad by Countries

as of 31 December 2009

Country	million EUR	% of total
1. Latvia	1 381.5	30.4
2. Lithuania	1 267.1	27.9
3. Cyprus	550.9	12.1
4. Finland	217.6	4.8
5. Russia	203.6	4.5
6. Ukraine	178.7	3.9
7. Italy	158.2	3.5
8. Poland	104.6	2.3
9. Belarus	61.7	1.4
10. Spain	52.4	1.2
Others	562.2	8.0
Total	4 537.3	100.0

Source: Bank of Estonia

Telecommunications and IT

	12/2005	12/2006	12/2007	12/2008	12/2009
Telephone main (fixed) lines per 100 inhabitants	32.8	33.7	35.7	37	37
Share of digital lines (%)	83	85	86	84	93
Number of mobile phone subscribers per 100 inhabitants	107	123	147.6	121.2	117.2
Broadband connections per 100 inhabitants (%)	17	21	21	24	25
Number of households connected to broadband per 100 homes	36	44	44	50	53

Sources: Estonian Technical Surveillance Authority

76% of population aged 16 to 74 are Internet users (2010, Statistics Estonia).
63% of households have access to the Internet at home (2009, Statistics Estonia).
All Estonian schools are connected to the Internet.
All Estonian towns and villages are covered by the network of public Internet access points.
There are more than 1 100 free wireless Internet zones around the country. More information: www.wifi.ee
Incomes can be declared to the Tax and Customs Board via Internet. In 2010, the percentage of electronic tax declarations was 92.
Expenditures made in state budget can be followed on the Internet in real-time
The Government has changed Cabinet meetings to paperless sessions using a web-based document system
All of Estonia is covered with digital mobile phone networks

With its policies and innovative initiatives the Estonian Government is helping companies make the information technology sector one of the fastest growing in the country. The World Economic Forum's Global Information Technology Report 2009-2010 - The Networked Readiness Index, also indicates a strong Estonian standing in government and the community readiness to participate in and benefit from ICT developments: the study ranks Estonia 25th out of 133 countries thanks to its regulatory framework for ICT, making Estonia the leader among the Central and Eastern European countries.

Economic Development Perspectives

Growth and associated factors 2009-2014

Main economic indicators	2009	2010*	2011*	2012*	2013*	2014*
GDP real growth (%)	-14.1	1.0	4.0	4.2	3.9	3.7
GDP (current prices, billion EUR)	13.7	13.6	14.5	15.4	16.4	17.5
GDP deflator (%)	-0.6	-1.6	1.9	2.4	2.6	2.7
Consumer price index (%)	-0.1	1.1	2.0	2.4	2.7	2.7
Employment (15–74 years old, thousands)	595.8	576.4	579.3	588.6	601.5	614.7
Employment growth (%)	-9.2	-3.3	0.5	1.6	2.2	2.2
Real growth in labour capacity	-5.3	4.4	3.5	2.6	1.7	1.4
Unemployment rate (ILO)	13.8	15.5	13.9	11.9	9.5	7.0
Average wage (EUR)	787.2	765.2	783.9	810.9	844.6	880.1
Wage real growth (%)	-4.5	-3.8	0.4	1.0	1.5	1.5
Current account (% of GDP)	4.6	6.5	5.0	2.3	-1.0	-3.0

* Forecast;
Source: Ministry of Finance, April 2010

A Comparison of Economic Forecasts from Various Institutions 2010-2011

	Economic growth, %		Consumer price index, %		Current account, % of GDP
	2010	2011	2010	2011	2010	2011
IMF	0.8	3.6	0.8*	1.1*	4.7	3.9
European Commission	0.9	3.8	1.3*	2.0*	4.9	3.8
Bank of Estonia	1.0	4.0	1.3*	1.1*	3.4	1.5
Ministry of Finance	1.0	4.0	0.8*	2.0*	6.5	5.0