WIIW The Vienna Institute for International Economic Studies - Wiener Institut für Internationale Wirtschaftsvergleiche

The Estonian economy performed at below the EU-CEE average in H1, and GDP is now expected to decline by 1.3% in 2023 as a whole, as the aftermath of severe inflation, major supply issues and interest rate hikes unfolds. With shrinking domestic and foreign demand, the outlook for recovery will largely be determined by the country’s success in gaining a share of new markets, the resurgence of foreign direct investment and the revival of Estonian firms’ competitiveness. Economic growth is expected to gain ground slowly but steadily from next year onwards, with GDP growth forecast to be 1.7% in 2024 and 3.0% in 2025.