The Estonian Ministry of Finance reported that additional data and an unusually large annual statistical revision show the economy performed better in recent years than previously estimated. The economy grew in 2022 rather than contracting, while growth in 2025 was also faster than earlier figures indicated. Annual growth reached 2.9% in the first quarter of 2026 before slowing to 1.8% in the second quarter, probably reflecting higher fuel prices and renewed uncertainty following the outbreak of the Middle East crisis. Manufacturing is recovering as export markets improve, including traditional markets in Finland and Sweden, although employers remain cautious about permanent hiring. Domestic demand is receiving support from lower income taxes, which have increased the average wage earner’s after-tax income by nearly 10%, alongside employer-funded wage growth of more than 5%. Consumption growth remained moderate in the first half, while business and household confidence has resumed its broader upward trend since May, supporting moderate growth in the coming quarters.
2026-08-31Ministry of Finance (Estonia)
Estonian Ministry of Finance assesses economy as stronger than previously estimated, with second-quarter growth at 1.8%
The Estonian Ministry of Finance assessed that revised data show the economy grew in 2022 and remained stronger in subsequent years than previously estimated. Growth slowed from 2.9% in the first quarter of 2026 to 1.8% in the second, while recovering exports, lower income taxes and improving confidence support moderate near-term growth.