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EstoniaCEO’s Guide to The Economy

3Q 2021

ECONOMYCharting CEO’s Guide to

The Economy

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CEO’s Guide to The Economy 2

To understand something, begin with questions, not information

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CEO’s Guide to The Economy

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3

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Why long-term economic growth?

To Improve the Living StandardHow to grow the economy in the long run?

Increase these 3 factors

Population (Labor)

Capital

Idea

The Long View: the Why and How of Economic Growth

Gross Income

Per Capita Income

Living Standard

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Short-term Objective: Balancing Growth and Stability

Inflation

Exchange Rate

BOP / External Debt

Private Consumption (C)

Public Consumption (G)

Growth Stability

Investment (I)

Net Export (X-M)

Fiscal Balance

Financial System

Employment

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• What is the size of Estonia’s economy?

• What is the size of Estonia’s population?

• What is the demographic structure of Estonia? Is it favorable for economic growth?

• How has the structure of GDP changed over the years?

• How much does Estonia’s economy rely on external trade?

• Where are the key economic regions in Estonia?

• Economic Freedom Index: How free is Estonia’s economy?

• How competitive is Estonia?

• How are Estonia’s competitive factors compared to those of other countries?

• How is the minimum wage in Estonia compared to others in the region?

• How has labor productivity in Estonia changed over the years, and in relation to comparable countries?

• Is it easy to do business in Estonia?

• How good is Estonia in attracting Foreign Direct Investment?

• What is the level of income for an average person in Estonia?

• What is the poverty rate in Estonia, and how does it compare to others?

• How has the unemployment rate in Estonia changed over recent years?

• How is income distributed in Estonia, and how does it compare to others?

• What is the current level of human development in Estonia?

• How has the quality of life changed over the years?

• How many SDG has Estonia achieved to date?

• What has been the growth rate of Estonia’s economy over the past ten years, and how does it compare with others?

• What were the key growth drivers for Estonia’s economy in the last year?

• How much does each sector contribute to the overall growth?

• What is the GDP growth rate in the latest quarter?

• What are the latest signals from the leading indicators?

• What is the growth outlook for Estonia’s economy over the next three years, and how does it compare with others?

• How early can the economy reopen from the Covid crisis?

• What is the risk of inflation over the next 12 months?

• What is the latest move on Estonia’s monetary policy?

• What is the health of Estonia’s banking sector?

• What has been the trend in Estonia’s fiscal budget deficit?

• Balance of Payment: Where are the key risks?

• What is the FX risk? How has the currency performed compared to others?

6

The Charting Economy Framework©

Understand Any Economy in 30 Questions or Less

Economic Structure Competitiveness Development Economic Growth Macro Risks

The Long View The Short View

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Official name: Republic of Estonia

Brief history• The Bulgars, a Central Asian Turkic tribe, merged with the local Slavic inhabitants in the late 7th century to form the first Estonian state

• Estonia became independent from the Ottoman Empire in 1908

• Having fought on the losing side in both World Wars, Estonia fell within the Soviet sphere of influence and became a People's Republic in

1946

• Communist domination ended in 1990, when Estonia held its first multiparty election since World War II and began the contentious process

of moving toward political democracy and a market economy while combating inflation, unemployment, corruption, and crime

• The country joined NATO in 2004 and the EU in 2007

7

Government

Government type: parliamentary republic

Capital: Tallinn

Currency: Euro (EUR)

Chief of state: President Kersti KALJULAID (since 10 October

2016)

Head of government: Prime Minister Kaja KALLAS (since 26

January 2021)

Cabinet: Cabinet appointed by the prime minister, approved by

Parliament

Elections:• president indirectly elected by Parliament for a 5-year term (eligible for

a second term); next to be held in 2021• prime minister nominated by the president and approved by Parliament

Geography

Area: 45,228 sq km (#133 in the world)

Land boundaries:

• Latvia 333 km

• Russia 324 km

Land Use (2011est.):

• agriculture: 22.2%

• forest: 52.1%

• other: 25.7%

Coastline: 3,794 km

Irrigated land: 44 sq km (2012)

Natural resources:

oil shale, peat, rare earth elements, phosphorite, clay, limestone, sand, dolomite, arable land, sea mud

Source: CIA World factbook

Population and society

Population:

1,220,042 (July 2021 est.)

Ethnic group:

Estonian 68.7%, Russian 24.8%, Ukrainian 1.7%, Belarusian 1%,

Finn 0.6%, other 1.6%, unspecified 1.6% (2011 est.)

Language:

Estonian (official) 68.5%, Russian 29.6%, Ukrainian 0.6%, other

1.2%, unspecified 0.1% (2011 est.)

Religions:

Lutheran 9.9%, Orthodox 16.2%, other Christian 2.2%, other 0.9%,

none 54.1%, unspecified 16.7% (2011 est.)

Working age population (15-64 yr): 62.8%

Population growth rate: -0.69% (2021 est.)

Estonia

ECONOMYCharting


1. Economic Structure2. Competitiveness

3. Economic Development

4. Economic Growth

5. Macro Risks

Appendix 1: IMF’s forecast

Appendix 2: Doing Business

Part of the country’s economic profile, economic structure section gives readers useful views to understand economic fundamental and determine what matters for the country’s

economy

8

What is the size of Estonia’s economy?

What is the size of Estonia’s population?

What is the demographic structure of Estonia? Is it

favorable for economic growth?

How has the structure of GDP changed over the years?

How much does Estonia’s economy rely on external

trade?

Where are the key economic regions in Estonia?

Economic Freedom Index: How free is Estonia’s

economy?

ECONOMYCharting


What is the size of Estonia’s economy?

Estonia is the smallest economy among the Baltic states

Source: IMF World Economic Outlook Database April 2021

Note: (*) IMF Estimate

3,803

2,711

2,599

1,885

1,474

1,278

910

747

720

594

538

513

429

419

403

362

352

271

247

241

231

189

155

Germany

UK

France

Italy

Russia

Spain

Netherlands*

Switzerland*

Turkey

Poland

Sweden*

Belgium

Austria*

Ireland*

Israel

Norway*

Denmark*

Finland*

Romania*

Czech Republic*

Portugal

Greece

Hungary

152

104

73

69

60

57

56

53

53

33

31

24

22

19

16

15

15

12

12

12

8

5

2

Ukraine*

Slovakia*

Luxembourg

Bulgaria*

Belarus*

Croatia*

Lithuania

Serbia*

Slovenia

Latvia

Estonia

Cyprus

Iceland*

Bosnia and Herzegovina*

Georgia*

Albania*

Malta

Armenia*

North Macedonia

Moldova*

Kosovo*

Montenegro

San Marino*

European Economies2020 GDP, USD billion, Market Exchange Rate

ECONOMYCharting


What is the size of Estonia’s population?

Estonia is a small country with population of around 1.2 million, less than half of those in Lithuania

Source: CIA World Fact book, UN’s World Population Prospects: The 2019 Revision

43.7

38.2

10.7

9.4

5.4

3.3

2.7

2.1

1.9

1.2

0.4

Ukraine

Poland

Czechia

Belarus

Slovakia

Moldova

Lithuania

Slovenia

Latvia

Estonia

Iceland

-0.648%

-0.176%

0.089%

-0.136%

-0.037%

-0.298%

-0.986%

-0.057%

-0.951%

-0.302%

0.574%

PopulationSelected countries, Million, July 2021 est.

Population GrowthAvg. Annual Rate of Change, Medium fertility, 2020-2025

ECONOMYCharting


America: USD 1800 (74% saving)Argentina (4) Bolivia (2) Brazil (4) Canada (4)

Chile (4) Colombia (4) Costa Rica (2) Ecuador (2)

El Salvador (2) Honduras (2) Mexico (4) Panama (2)

Paraguay (2) Peru (4) United States (4) Uruguay (4)

Asia Pacific: USD 2500 (77% saving)Australia (4) Azerbaijan (2) Bangladesh (2) Brunei (2)

Cambodia (2) China (4) Hong Kong (4) India (4)

Indonesia (4) Japan (4) Kazakhstan (2) Laos (2)

Malaysia (4) Mongolia (4) Myanmar (2) Nepal (2)

New Zealand (4) Pakistan (2) Philippines (4) Singapore (4)

South Korea (4) Sri Lanka (4) Taiwan (4) Thailand (4)

Vietnam (4)

Europe: USD 4100 (77% saving)Albania (4) Armenia (4) Austria (4) Belarus (4)

Belgium (4) Bosnia and Herzegovina (4) Bulgaria (4) Croatia (4)

Cyprus (4) Czech republic (4) Denmark (4) Estonia (4)

Finland (4) France (4) Georgia (4) Germany (4)

Greece (4) Hungary (4) Iceland (4) Ireland (4)

Israel (4) Italy (4) Latvia (4) Lithuania (4)

Luxembourg (4) Malta (4) Netherlands (4) Norway (4)

Poland (4) Portugal (4) Romania (4) Russia (4)

Serbia (4) Slovakia (4) Slovenia (4) Spain (4)

Sweden (4) Switzerland (4) Turkey (4) Ukraine (4)

United Kingdom (4)

Middle East and Africa: USD 2500 (76% saving)Algeria (2) Bahrain (2) Benin (2) Botswana (2)

Cameroon (2) Cote d'Ivoire (2) Egypt (2) Ethiopia (2)

Ghana (2) Guinea (2) Jordan (2) Kenya (2)

Kuwait (2) Mauritius (2) Morocco (2) Nigeria (4)

Oman (2) Qatar (2) Rwanda (2) Saudi Arabia (2)

Senegal (2) South Africa (4) Tanzania (2) UAE (2)

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