Source: IMF – News in Russian
Tallinn, Estonia – May 19, 2025: Estonia is gradually re-emerging from a prolonged downturn but continues to grapple with higher prices and costs, a legacy of previous shocks, while high global policy uncertainty and rising trade barriers hinder a more vigorous recovery. Innovative young firms, a potential growth engine, are constrained by lack of skilled labor and limited access to capital markets. At the same time, fast-rising defense spending needs compound preexisting fiscal imbalances. In this context, the 2025 budget strikes an appropriate balance between sustaining spending efforts and containing the deficit. However, staff recommends implementing a further moderate adjustment starting from 2026 to address growing imbalances, stabilize the debt ratio, and preserve buffers. Carefully calibrated macroprudential policies, decisive domestic structural reforms aimed at easing reallocation of labor and reducing regulatory burden, and a deeper EU single market would be instrumental in building resilience and supporting growth in the medium term.
https://www.imf.org/en/News/Articles/2025/05/19/CS-Estonia-2025