OUTLOOK 2019 Estonia

OUTLOOK 2019 Estonia
By bne IntelliNews December 21, 2018


Estonia is facing a general election in 2019, which President Kersti Kaljulaid has called for March 3. 

The ruling Centre Party is currently leading the polls although its result in a December poll by Kantar Emor was one of the weaker ones recently at 25.9%. The Reform Party came second at 23%. The third strong contender will be the Conservative People’s Party of Estonia, which is polling at 18%-20%.

The liberal Reform Party will be hoping to return to power after being ousted by the Centre Party in 2016. The liberals will want to focus the campaign on the issues of economy and taxation, their leader Kaja Kallas said in November.

"Although public debate has been addressing other topics in recent days, we continue to be convinced that the main topic for these elections is whom the people of Estonia will entrust with leading the country in matters of taxes and the economy in the coming years," Kallas said in late November.

Estonia will face the task of shaking off the effects of a major money laundering scandal that hit the country’s reputation in 2018. The local branch of Danske Bank was revealed to have lax controls over money flows incoming from outside of the EU, mainly Russia. The case prompted discussion on reforming the Eurozone’s powers of monitoring banks.

The new government – whichever emerges after the March election – is likely to put the issue high on its priority list. Also there will be the country’s dwindling population and new immigration, which, relative to Estonia’s population of just over 1mn, could easily become a political issue in a country that already has tensions running along nationality lines because of its sizeable Russian minority. 


Estonia’s economic growth is expected at 2.8% in 2019 in the autumn forecast from the European Commission. That would be a slowdown from a growth of 3.5% predicted in 2018.

The European Bank for Reconstruction and Development (EBRD) has GDP expansion slow down even more significantly to 3% on the back of labour constraints hitting business investment and exports. Rising wages will continue to uphold strong household consumption, however, which will be only fractionally offset by the expected rise in inflation.

The International Monetary Fund (IMF) also predicts growth will ease to 3.2% in the new year.


The balanced budget for 2019 envisages spending of just over €11bn. Finance Minister Toomas Toniste described the country as being in the “financial premier league of Europe” and told the parliament that the budget reflects the country’s stable economic growth, and will support further growth, social welfare and defence without raising taxes or increasing the debt burden. 


Estonia has successfully established itself as a tech champion, a process fully supported by the government that was the initiator of a flagship digital  citizenship scheme. 

Among other new investments in the sector, MCF Group Estonia plans to start building a major data centre in the country in 2019 with a €100mn investment. 

The country also has a vibrant startup scene. Local Tera Ventures is announced the first closing of its new Tera Ventures Fund II on  €21mn in September, while recipients of venture capital include Pipedrive that raised €50mn from a group of international firms in June, the same month as startup Veriff raised $7.7mn in a smaller but still significant funding round.