Estonia

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Economic and political outline

Economic indicators | Foreign Trade in figures | Sources of general economic information | Political outline

Economic indicators

Estonia, which became a member of the European Union on the 1st May of 2004 is an attractive investment location in the Baltic Sea (Europe's fastest growing market with 90 million people) with a sound and fast growing economy. A balanced budget (guaranteed by constitution), flat-rate income tax, free trade regime, fully convertible currency, competitive commercial banking sector, and hospitable environment for foreign investment are hallmarks of Estonia's free-market-based economy. The GDP growth rate was 11.2% in 2006 and 8% in 2007, with a forecast of 6% in 2008. The privatization of state-owned firms is virtually complete, with only the port and the main power plants remaining in government hands. The unemployment rate is estimated to have declined substantially to nearly 5%. The inflation has faced a revival from 4.5% in 2006 to 6% in 2007.

Main indicators	2006	2007	2008	2009	2010
GDP (billions USD)	16.45	20.90	23.23e	18.78	18.53
GDP (constant prices, annual % change)	10.4	6.3	-3.6e	-10.0	-1.0e
GDP per capita (USD)	12,232	15,569e	17,299e	13,982e	13,785
Inflation rate (%)	4.4	6.6	10.4	0.8	-1.3e
Unemployment rate (% of the labor force)	-	-	5.1	-	-
Current Account (billions USD)	-2.75	-3.78	-2.14	-1.23e	-1.00
Current Account (in % of GDP)	-16.7	-18.1	-9.2e	-6.5	-5.4e

Source: IMF - World Economic Outlook Database ; CIA - The world factbook

Note: (e) Estimated data

Main sectors of industry

The main industrial sectors of Estonia are: food industry (dairy products and meat processing) which formed 16,7% of the manufacturing industry in 2007, electronics (a traditional sector), chemical industry (it accounted for 5,7 % of the manufacturing in 2007), wood processing industry (the share of wood processing in the manufacturing industry represents 23,6%), machine building and metalworking industry, transport and logistics, biotechnology, financial services and construction.

Breakdown of economic activity by sector	Agriculture	Industry	Services
Employment by sector (in % of total employment)	5.3	34.0	60.7
Value added (in % of GDP)	2.8	30.4	66.8
Value added (annual % change)	-10.4	8.4	5.0

- last available data.

Monetary indicators	2004	2005	2006	2007	2008
Estonian Kroon (EEK) - Average annual exchange rate for 1 USD	12.60	12.58	12.47	11.43	10.69

Source: World Bank - World Development Indicators

Indicator of economic freedom

Score:: 76.4/100
Position:: mostly free
World Rank:: 13 out of 179
Regional Rank:: 6 out of 44

Distribution of Economic freedom in the world
Source: 2008 Index of Economic freedom, Heritage Foundation

Country risk

See the country risk analysis provided by Ducroire.

Foreign trade in figures

In 2007, the exports of Estonian goods made up to 8 billion Euros and imports accounted for 11,3 million Euros. The share of the European Union countries accounted for 70% and the share of CIS countries for 11% of the total exports. The nearby Finland and Sweden are main trading partners of Estonia together with European Union and Russia. Estonia exports mainly machinery and equipment, mineral products, woods and products thereof, metals, agricultural products and food preparation, transport equipment, raw materials, and textiles. Estonia mainly imports electric & electronic equipment, machinery, vehicles, mineral fuels & oils, and iron & steel.

Foreign trade indicators	2003	2004	2005	2006	2007
Imports of goods (millions USD)	6,164	7,877	9,704	12,777	14,756
Exports of goods (millions USD)	4,597	5,887	7,792	9,755	11,078
Imports of services (millions USD)	1,393	1,747	2,150	2,440	3,072
Exports of services (millions USD)	2,224	2,848	3,187	3,512	4,394
Imports of goods and services (annual % change)	10.1	15.5	17.5	20.4	4.2
Exports of goods and services (annual % change)	7.4	14.2	20.9	11.6	-0.0
Imports of goods and services (in % of GDP)	76.9	81.2	86.3	92.4	85.3
Exports of goods and services (in % of GDP)	69.4	73.0	80.0	80.9	74.4
Trade Balance (millions USD)	-1,567	-1,990	-1,911	-3,022	-3,678
Trade Balance (including service) (millions USD)	-736	-889	-874	-1,951	-2,357
Foreign trade (in % of GDP)	146.3	154.2	166.4	173.3	159.7

Source: World Bank

Main partner countries

Main customers (% of exports)	2008
Finland	18.4%
Sweden	13.9%
Russia	10.4%
Latvia	10.0%
Lithuania	5.7%
Germany	5.1%
United States	4.8%
Norway	3.3%
Denmark	3.3%
United Kingdom	2.7%
Netherlands	2.3%
Poland	1.9%
Turkey	1.8%
Ukraine	1.7%
France	1.4%
Italy	1.2%
Belgium	1.2%
Nigeria	0.7%
Spain	0.7%
Belarus	0.6%
See more countries	41.7%

Main suppliers (% of imports)	2008
Finland	14.3%
Germany	13.4%
Sweden	10.0%
Lithuania	8.9%
Latvia	8.8%
Russia	7.6%
Poland	4.6%
Netherlands	3.3%
United Kingdom	3.2%
Belarus	2.9%
Italy	2.5%
China	2.1%
Denmark	2.1%
France	2.0%
Belgium	2.0%
Czech Republic	1.2%
United States	1.2%
Ukraine	1.1%
Austria	0.8%
Spain	0.7%
See more countries	44.6%

Source: Comtrade

Main products

Main exports (% of exports)	2008
Electrical machinery and equipment and parts...Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles	14.5%
Mineral fuels, mineral oils and products of their...Mineral fuels, mineral oils and products of their distillation; bituminous substances; mineral waxes	11.1%
Wood and articles of wood; wood charcoalWood and articles of wood; wood charcoal	8.1%
Vehicles other than railway or tramway...Vehicles other than railway or tramway rolling-stock, and parts and accessories thereof	6.6%
Nuclear reactors, boilers, machinery and...Nuclear reactors, boilers, machinery and mechanical appliances; parts thereof	6.3%
Furniture; bedding, mattresses, mattress supports,...Furniture; bedding, mattresses, mattress supports, cushions and similar stuffed furnishings; lamps and lighting fittings, not elsewhere specified or included; illuminated signs, illuminated name-plates and the like; prefabricated buildings	6.1%
Iron and steelIron and steel	5.5%
Articles of iron or steelArticles of iron or steel	3.6%
Plastics and articles thereofPlastics and articles thereof	2.4%
Beverages, spirits and vinegarBeverages, spirits and vinegar	2.0%
Articles of apparel and clothing accessories, not...Articles of apparel and clothing accessories, not knitted or crocheted	1.7%
Tanning or dyeing extracts; tannins and their...Tanning or dyeing extracts; tannins and their derivatives; dyes, pigments and other colouring matter; paints and varnishes; putty and other mastics; inks	1.7%
Optical, photographic, cinematographic, measuring,...Optical, photographic, cinematographic, measuring, checking, precision, medical or surgical instruments and apparatus; parts and accessories thereof	1.6%
Dairy produce; birds' eggs; natural honey; edible...Dairy produce; birds' eggs; natural honey; edible products of animal origin, not elsewhere specified or included	1.5%
Paper and paperboard; articles of paper pulp, of...Paper and paperboard; articles of paper pulp, of paper or of paperboard	1.4%
Aluminium and articles thereofAluminium and articles thereof	1.2%
Glass and glasswareGlass and glassware	0.9%
Pulp of wood or of other fibrous cellulosic...Pulp of wood or of other fibrous cellulosic material; recovered (waste and scrap) paper or paperboard	0.8%
FertilizersFertilizers	0.7%
Fish and crustaceans, molluscs and other aquatic...Fish and crustaceans, molluscs and other aquatic invertebrates	0.7%
Articles of apparel and clothing accessories,...Articles of apparel and clothing accessories, knitted or crocheted	0.7%
Organic chemicalsOrganic chemicals	0.7%
Salt; sulphur; earths and stone; plastering...Salt; sulphur; earths and stone; plastering materials, lime and cement	0.7%
Miscellaneous chemical productsMiscellaneous chemical products	0.7%
Printed books, newspapers, pictures and other...Printed books, newspapers, pictures and other products of the printing industry; manuscripts, typescripts and plans	0.6%
Preparations of meat, of fish or of crustaceans,...Preparations of meat, of fish or of crustaceans, molluscs or other aquatic invertebrates	0.6%
Miscellaneous edible preparationsMiscellaneous edible preparations	0.6%
Other made-up textile articles; sets; worn...Other made-up textile articles; sets; worn clothing and worn textile articles; rags	0.6%
Toys, games and sports requisites; parts and...Toys, games and sports requisites; parts and accessories thereof	0.6%
Inorganic chemicals; organic or inorganic...Inorganic chemicals; organic or inorganic compounds of precious metals, of rare-earth metals, of radioactive elements or of isotopes	0.6%
Footwear, gaiters and the like; parts of such...Footwear, gaiters and the like; parts of such articles	0.5%
Rubber and articles thereofRubber and articles thereof	0.5%
CerealsCereals	0.5%
Articles of stone, plaster, cement, asbestos, mica...Articles of stone, plaster, cement, asbestos, mica or similar materials	0.5%
Animal or vegetable fats and oils and their...Animal or vegetable fats and oils and their cleavage products; prepared edible fats; animal or vegetable waxes	0.5%
Copper and articles thereofCopper and articles thereof	0.4%
Pharmaceutical productsPharmaceutical products	0.4%
Meat and edible meat offalMeat and edible meat offal	0.4%
Ships, boats and floating structuresShips, boats and floating structures	0.4%
Furskins and artificial fur; manufactures thereofFurskins and artificial fur; manufactures thereof	0.3%
Railway or tramway locomotives, rolling-stock and...Railway or tramway locomotives, rolling-stock and parts thereof; railway or tramway track fixtures and fittings and parts thereof; mechanical (including electro-mechanical) traffic signalling equipment of all kinds	0.3%
Ceramic productsCeramic products	0.3%
Coffee, tea, maté and spicesCoffee, tea, maté and spices	0.3%
Oil seeds and oleaginous fruits; miscellaneous...Oil seeds and oleaginous fruits; miscellaneous grains, seeds and fruit; industrial or medicinal plants; straw and fodder	0.3%
Soap, organic surface-active agents, washing...Soap, organic surface-active agents, washing preparations, lubricating preparations, artificial waxes, prepared waxes, polishing or scouring preparations, candles and similar articles, modelling pastes, 'dental waxes' and dental preparations with a basis of plaster	0.3%
Preparations of cereals, flour, starch or milk;...Preparations of cereals, flour, starch or milk; pastrycooks' products	0.3%
Other base metals; cermets; articles thereofOther base metals; cermets; articles thereof	0.2%
Live animalsLive animals	0.2%
Tools, implements, cutlery, spoons and forks, of...Tools, implements, cutlery, spoons and forks, of base metal; parts thereof of base metal	0.2%
Lead and articles thereofLead and articles thereof	0.2%
Miscellaneous manufactured articlesMiscellaneous manufactured articles	0.2%
Edible fruit and nuts; peel of citrus fruits or...Edible fruit and nuts; peel of citrus fruits or melons	0.2%
CottonCotton	0.2%
Wadding, felt and nonwovens; special yarns; twine,...Wadding, felt and nonwovens; special yarns; twine, cordage, ropes and cables and articles thereof	0.2%
Carpets and other textile floor coveringsCarpets and other textile floor coverings	0.1%
Albuminoidal substances; modified starches; glues;...Albuminoidal substances; modified starches; glues; enzymes	0.1%
Sugars and sugar confectionerySugars and sugar confectionery	0.1%
Miscellaneous articles of base metalMiscellaneous articles of base metal	0.1%
Products of the milling industry; malt; starches;...Products of the milling industry; malt; starches; inulin; wheat gluten	0.1%
Residues and waste from the food industries;...Residues and waste from the food industries; prepared animal fodder	0.1%
Impregnated, coated, covered or laminated textile...Impregnated, coated, covered or laminated textile fabrics; textile articles of a kind suitable for industrial use	0.1%
Other vegetable textile fibres; paper yarn and...Other vegetable textile fibres; paper yarn and woven fabrics of paper yarn	0.1%
See more products	53.3%

Main imports (% of imports)	2008
Mineral fuels, mineral oils and products of their...Mineral fuels, mineral oils and products of their distillation; bituminous substances; mineral waxes	15.5%
Electrical machinery and equipment and parts...Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles	11.5%
Vehicles other than railway or tramway...Vehicles other than railway or tramway rolling-stock, and parts and accessories thereof	9.7%
Nuclear reactors, boilers, machinery and...Nuclear reactors, boilers, machinery and mechanical appliances; parts thereof	8.8%
Iron and steelIron and steel	4.8%
Plastics and articles thereofPlastics and articles thereof	3.6%
Beverages, spirits and vinegarBeverages, spirits and vinegar	2.7%
Articles of iron or steelArticles of iron or steel	2.6%
Wood and articles of wood; wood charcoalWood and articles of wood; wood charcoal	2.4%
Pharmaceutical productsPharmaceutical products	2.2%
Paper and paperboard; articles of paper pulp, of...Paper and paperboard; articles of paper pulp, of paper or of paperboard	1.8%
Furniture; bedding, mattresses, mattress supports,...Furniture; bedding, mattresses, mattress supports, cushions and similar stuffed furnishings; lamps and lighting fittings, not elsewhere specified or included; illuminated signs, illuminated name-plates and the like; prefabricated buildings	1.4%
Optical, photographic, cinematographic, measuring,...Optical, photographic, cinematographic, measuring, checking, precision, medical or surgical instruments and apparatus; parts and accessories thereof	1.3%
Articles of apparel and clothing accessories, not...Articles of apparel and clothing accessories, not knitted or crocheted	1.3%
Organic chemicalsOrganic chemicals	1.3%
Aluminium and articles thereofAluminium and articles thereof	1.2%
Articles of apparel and clothing accessories,...Articles of apparel and clothing accessories, knitted or crocheted	1.1%
Tanning or dyeing extracts; tannins and their...Tanning or dyeing extracts; tannins and their derivatives; dyes, pigments and other colouring matter; paints and varnishes; putty and other mastics; inks	1.1%
Rubber and articles thereofRubber and articles thereof	0.8%
Miscellaneous chemical productsMiscellaneous chemical products	0.8%
Footwear, gaiters and the like; parts of such...Footwear, gaiters and the like; parts of such articles	0.7%
Meat and edible meat offalMeat and edible meat offal	0.7%
Glass and glasswareGlass and glassware	0.7%
FertilizersFertilizers	0.7%
Edible fruit and nuts; peel of citrus fruits or...Edible fruit and nuts; peel of citrus fruits or melons	0.6%
Essential oils and resinoids; perfumery, cosmetic...Essential oils and resinoids; perfumery, cosmetic or toilet preparations	0.6%
Animal or vegetable fats and oils and their...Animal or vegetable fats and oils and their cleavage products; prepared edible fats; animal or vegetable waxes	0.6%
Miscellaneous edible preparationsMiscellaneous edible preparations	0.6%
Articles of stone, plaster, cement, asbestos, mica...Articles of stone, plaster, cement, asbestos, mica or similar materials	0.5%
Man-made staple fibresMan-made staple fibres	0.5%
Miscellaneous articles of base metalMiscellaneous articles of base metal	0.5%
Fish and crustaceans, molluscs and other aquatic...Fish and crustaceans, molluscs and other aquatic invertebrates	0.5%
Toys, games and sports requisites; parts and...Toys, games and sports requisites; parts and accessories thereof	0.5%
Preparations of cereals, flour, starch or milk;...Preparations of cereals, flour, starch or milk; pastrycooks' products	0.5%
Preparations of meat, of fish or of crustaceans,...Preparations of meat, of fish or of crustaceans, molluscs or other aquatic invertebrates	0.5%
Sugars and sugar confectionerySugars and sugar confectionery	0.4%
Residues and waste from the food industries;...Residues and waste from the food industries; prepared animal fodder	0.4%
Tools, implements, cutlery, spoons and forks, of...Tools, implements, cutlery, spoons and forks, of base metal; parts thereof of base metal	0.4%
Soap, organic surface-active agents, washing...Soap, organic surface-active agents, washing preparations, lubricating preparations, artificial waxes, prepared waxes, polishing or scouring preparations, candles and similar articles, modelling pastes, 'dental waxes' and dental preparations with a basis of plaster	0.4%
Dairy produce; birds' eggs; natural honey; edible...Dairy produce; birds' eggs; natural honey; edible products of animal origin, not elsewhere specified or included	0.4%
Coffee, tea, maté and spicesCoffee, tea, maté and spices	0.4%
Ceramic productsCeramic products	0.4%
Preparations of vegetables, fruit, nuts or other...Preparations of vegetables, fruit, nuts or other parts of plants	0.4%
Other made-up textile articles; sets; worn...Other made-up textile articles; sets; worn clothing and worn textile articles; rags	0.4%
Natural or cultured pearls, precious or...Natural or cultured pearls, precious or semi-precious stones, precious metals, metals clad with precious metal, and articles thereof; imitation jewellery; coin	0.3%
Inorganic chemicals; organic or inorganic...Inorganic chemicals; organic or inorganic compounds of precious metals, of rare-earth metals, of radioactive elements or of isotopes	0.3%
Cocoa and cocoa preparationsCocoa and cocoa preparations	0.3%
Ships, boats and floating structuresShips, boats and floating structures	0.3%
Copper and articles thereofCopper and articles thereof	0.3%
CottonCotton	0.3%
Edible vegetables and certain roots and tubersEdible vegetables and certain roots and tubers	0.3%
Railway or tramway locomotives, rolling-stock and...Railway or tramway locomotives, rolling-stock and parts thereof; railway or tramway track fixtures and fittings and parts thereof; mechanical (including electro-mechanical) traffic signalling equipment of all kinds	0.2%
Products of the milling industry; malt; starches;...Products of the milling industry; malt; starches; inulin; wheat gluten	0.2%
Articles of leather; saddlery and harness; travel...Articles of leather; saddlery and harness; travel goods, handbags and similar containers; articles of animal gut (other than silkworm gut)	0.2%
Man-made filamentsMan-made filaments	0.2%
Printed books, newspapers, pictures and other...Printed books, newspapers, pictures and other products of the printing industry; manuscripts, typescripts and plans	0.2%
Salt; sulphur; earths and stone; plastering...Salt; sulphur; earths and stone; plastering materials, lime and cement	0.2%
Special woven fabrics; tufted textile fabrics;...Special woven fabrics; tufted textile fabrics; lace; tapestries; trimmings; embroidery	0.2%
Furskins and artificial fur; manufactures thereofFurskins and artificial fur; manufactures thereof	0.2%
Miscellaneous manufactured articlesMiscellaneous manufactured articles	0.2%
Tobacco and manufactured tobacco substitutesTobacco and manufactured tobacco substitutes	0.2%
CerealsCereals	0.2%
Impregnated, coated, covered or laminated textile...Impregnated, coated, covered or laminated textile fabrics; textile articles of a kind suitable for industrial use	0.2%
Knitted or crocheted fabricsKnitted or crocheted fabrics	0.2%
Wadding, felt and nonwovens; special yarns; twine,...Wadding, felt and nonwovens; special yarns; twine, cordage, ropes and cables and articles thereof	0.2%
Arms and ammunition; parts and accessories thereofArms and ammunition; parts and accessories thereof	0.2%
Live trees and other plants; bulbs, roots and the...Live trees and other plants; bulbs, roots and the like; cut flowers and ornamental foliage	0.1%
Zinc and articles thereofZinc and articles thereof	0.1%
Raw hides and skins (other than furskins) and...Raw hides and skins (other than furskins) and leather	0.1%
Albuminoidal substances; modified starches; glues;...Albuminoidal substances; modified starches; glues; enzymes	0.1%
See more products	49.7%

Source: Comtrade

See more products: More imports (Intracen Data)
More exports (Intracen Data)

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

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 2011
State Assembly: Year 2011

Indicator of freedom of the press

World Rank:: 4/173
Evolution:: 1 place down compared to 2007

Source: Worldwide Press Freedom Index 2007, Reporters Without Borders

Indicator of political freedom

Ranking:: Free
Political freedom:: 1/7
Civil liberties:: 1/7

Map of freedom 2007
Source: Freedom House

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