Posted: March 23rd, 2023

International Economics: Estonia

Background

• Estonia is a country located in the Baltic region of Northern Europe (Taylor & Bradt Travel Guides, 2014).
• Its capital city is
• The capital city holds the key offices of the national government.
• The total population in the country is 1.3 million (The Heritage Foundation, 2015).
• Estonian and English are the official languages of the country.

Notes

Estonia is a republic located in the Baltic region of Northern Europe, with Tallinn as its capital city. The capital city holds the key offices for the national government. The total population in the country is 1.3 million. The official languages include Estonian and English.

Economic Freedom

• The country’s score in the economic freedom is 76.8 (The Heritage Foundation, 2015).
• Estonia is number 2 out of 43 economies in the ranking. The score is above both the regional and world average.
• The score had improved over the last four years due to better fiscal policy, open markets, and efficiency in regulations.
• Enhanced property rights and the environment for entrepreneurship are also key contributors to the improved ranking.

 

 

 

 

 

Changes in Economic Freedom Index

Notes

The country’s score in the economic freedom stands at 76.8, which is position 2 out of 43 economies in the ranking, while the score above both the regional and world average. Better fiscal policy, open markets and efficiency in regulations are key factors in the improved score. Enhanced property rights and the environment for entrepreneurship are also key contributors to the improved ranking

Transparency

• The country’s freedom from corruption is 68 (The Heritage Foundation, 2015)
• The score is relatively high and above the world average
• The score is, however, dragged by the reported issues in government corruption
• For example, in 2013, some officials were involved in corrupt deals
• Corruption in the judiciary is reduced due to the insulation from the government

Notes

The country’s freedom from corruption is 68; the score is relatively high and above the world average.  However, the reported issues in government corruption drag the score. For instance, in 2013, some officials were involved in corrupt deals. Corruption in the judiciary is at a minimum due to the insulation from the government

Economic Openness and Trade Policy

• As a member of the EU, the country has an average tariff of 1.0 percent (The Heritage Foundation, 2015).
• Despite the present of some non-tariff barriers, the economy remains open to external trade
• The government and the law treat the foreign and domestic investors equally
• The country has a trade freedom of 88, which is significantly high (The Heritage Foundation, 2015)
• The economic openness and trade policy in the country makes the environment favorable for both the local and foreign traders

Notes

Being a member of the EU, Estonia has an average tariff of 1.0 percent. The economy remains open to external trade despite some of the non-tariff barriers applied. The government and the law treat the foreign and domestic investors equally and trade freedom of 88 is considerably high. Trading environment in the country is favorable for both the local and foreign traders

Currency and Banking

• The financial market is well regulated and has a continuous growth
• The banking sector is strong, open, and resilient
• The players in the sector offer a variety of financial products
• The Estonian currency is referred to as Kroon
• By being a member of the EU, the EURO is also an official currency

Notes

The financial market is well regulated and has a continuous growth, with a strong, open, and resilient banking sector. The players in the sector offer a variety of financial products to ensure that clients with various needs are assisted. The Estonian currency is referred to as Kroon, while the EURO is also an official currency

Economic Associations

• Estonian is a member of the European Union. The country joined the union in 2004 (Ministry of Foreign Affairs, n/d)
• Since 2010, the country joined the Organization for Economic Co-operation and Development  (Kaljurand, 2010)
• It has been a member of WTO since 13 November 1999 (WTO, 2015)
• The WTO has played a role in Negotiations involving Estonia as a member state of the EU (WTO, 2015)
• Estonia has free trade engagement with Bulgaria, Poland, Hungary, and the Czech Republic

Notes

Estonian is a member of the European Union and the Organization for Economic Co-operation and Development. The country has been a member of WTO since 13 November 1999, which played a role in Negotiations involving Estonia as a member state of the EU. Estonia has free trade engagement with Bulgaria, Poland, Hungary, and the Czech Republic

GDP per Capita

·         The GDP per capita in 2014 was 25, 865.16 US dollars

·         Its purchasing power parity is about 146 percent of the world’s average

·         The GDP per capita was 9, 423.05 USD in 1993 (Trading Economies, 2015)

·         The highest point ever was in 2007 at 26, 065.62 USD

The Graphical Representation

Notes

The GDP per capita of Estonia in 2014 was 25, 865.16 US dollars, up from 9, 423.05 USD in 1993. The highest point ever was in 2007 at 26, 065.62 USD.