An overview of the economy of the Estonia
Estonia has been ranked as 15out of 180 countries in the 2019 index in terms of economic freedom score and ranked 7th among 44 countries in the Europe region. Estonia’s overall score is also above the regional and the world averages.
The current government keep pursuing a free market, pro-business economic agenda and sound financial policies that led to balanced budgets, low public debts and more economic freedom. The economy relies on strong relationships of trade with Finland, Sweden and Germany and benefits from robust electronics and telecommunications sector.
Estonia’s economy slowed down significantly in the middle of 2008 and economic recession occurred due to the result of investment and consumption slump after the burst housing bubble. However, Estonia started to recover in 2010 and Estonia’s economic growth also got a lift in the first quarter of 2011.
Estonia’s Banking Sector
Estonia’s banking sector and electronic channels are highly developed, and the banking system includes the major banks thanks to Estonia’s Scandinavian connections. Besides, thanks to advanced electronic channels, 98% of total payment transactions are made through internet banking systems. Accession to commercial banks offers local and international services at very competitive prices, including internet and telephone banking.
Providing national support for businesses
Estonia is not only providing a business climate for attracting foreign direct investment but also providing a range of national support for businesses. The institution called EAS which is Enterprise Estonia is one of the biggest institutions in the national support system for entrepreneurship. It provides many services such as advisory, training for entrepreneurs, financial assistance, cooperation opportunities and so on. Since Estonia has an accession to the European Union, EAS has become one of the the implementing units of the European Union structural funds in Estonia. Today, most EAS programs and grants are co-financed from EU structural funds. EAS program has many representatives outside of Estonia such as in Hamburg, Helsinki, London, Shanghai, Silicon Valley, Stockholm, St. Petersburg, Tokyo, Kiev and Moscow.
In addition to these, Credit and Export Guarantee Fund Kredex in Estonia could also give support to businesses. The support programs include, for instance, a start-up loan to finance investments and the working capital of start-ups; a business loan guarantee for businesses that are not sufficient to obtain a bank loan or do not have a long business history and a subordinated loan for sustainable companies, where banks are not ready to finance due to insufficient self-financing and guarantees.