Income convergence has slowed down

Export performance has been resilient

Investment has weakened

Well-being can be improved

Estonia lags behind in terms of income inequality and poverty

Economic indicators

Labour market conditions have tightened

Unit labour costs have increased fast

Investment has lost ground

Skill shortages are a major obstacle to investment

House prices are recovering

The financial sector is well capitalised and profitable

Macroeconomic vulnerabilities have diminished since 2007

Fiscal policy has been prudent

Fiscal space is large

Taxes on immovable property are among the lowest in the OECD

High taxes on low wage earners are set to decrease

Health outcomes vary strongly with socio-economic background

The gender pay gap is high

Gender stereotypes are pronounced

Export orientation and gains in export market shares are comparable to peers

Value added per worker embodied in foreign demand is low

The business environment is favourable

Credit recovery is low

The insolvency regime is inefficient

Employment and participation rates are high

Labour migration is modest

A large share of Estonians feels under-skilled

Businesses are little involved in the provision of vocational education and training

Participation in lifelong learning is good but low educated lag behind

Estonia is a frontrunner in alternative finance but amounts are low

The quality of infrastructure is average

The quality of logistics infrastructure is poor

Investment in intangible capital is well below OECD standards

Innovation capacity is low

Fixed broadband penetration and ICT use could improve

Green growth indicators

Energy consumption is high by international standards

A snapshot of Estonian foreign trade

Estonia is well integrated into global value chains and mostly as a service provider

Exporters could import more value added from abroad

Complexity of exported goods

Employment in exports of higher value added activities increased modestly

Domestic value added of exports remains limited though on a par with peer countries

Performance of export entrants

Scope to improve regulation affecting trade

Business-driven innovation and spending on R&D are low

Innovation activity is limited

Annual quota were reached recently, while the number of highly skilled migrants is modest

Routine intensive jobs are at risk of automatisation

Some groups of population are consistently left behind

Spending on active labour market policies is low

The share of social benefits received by the poor is low and has declined

Low investment has curbed growth

Investment intensity has declined in most sectors

FDI inflows have dropped and are mostly reinvested earnings

Intellectual property products account for a small share of total investment

Low demand and labour shortages are viewed as main obstacles to business growth

The GDP slowdown does not fully explain the recent drop in investment

Increasing savings have not been used to invest

Capital intensity remains well below the OECD average

Firms mainly use internal funds to finance investment

A large share of firms does not apply for bank financing because of possible rejection

Parental leave is the lengthiest in the OECD

Investments in road and rail have been high

Freight flows have declined

The share of renewables in electricity is low