Investor Presentaiton
Key credit highlights of Estonia
Estonia benefits from a flexible economy, low debt, strong institutions and energy security
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Growth averaged 2.7% annually in the five years to 2022¹; well above the EU average
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GDP is projected to have declined by 2% in 2023, mostly due to weak performance of main trading partners²
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Developed,
flexible and
competitive
economy
High fiscal
buffers and low
debt
Strengthened
energy and
external security
Strong
governance and
predictable
institutions
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Stable banking
sector with solid ⚫
ratios
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Estonia recovered fast from the Covid-19 emergency, driven by strong export growth and a well-performing ICT sector³
GDP had recovered and exceeded its pre-covid level in one year, by Q4 2020; compared with most of EU member states
who reached the pre-crisis level in mid-2021
NGEU* funds are expected to provide a further boost to the recovery from 2023
As an EMU* member, Estonia benefits from euro stability and from the ECB's* monetary tools
Unemployment remains relatively low at 7.3% in 3Q 2023 (5.6% in 2022)¹
General government budget roughly in balance for a decade prior to 2020
High fiscal buffers have allowed proactive targeted social spending during the Covid-19 and Ukraine crises
Efficient tax system and attractive corporate tax rates support Estonia's competitiveness
Estonia had the lowest general government debt-to-GDP level of any EU country at 18.5% of GDP in 2022¹
Russian gas imports are being replaced by liquified natural gas (LNG) imports from Lithuania and Finland, while a new
back up location for the Finnish LNG terminal has also been built in Estonia
At 6.2%, Estonia has the lowest energy import-dependence ratio among EU countries (average 62.5%) in 20224
Energy security is secured by Estonia's large oil shale reserves which are sufficient to meet domestic energy needs
Firmly committed to the renewable energy transition, with 38% of energy consumed in 2022 from renewable sources
(30% in 2020)4
Defence spending is expected to increase to 3% of GDP over 2023-27 whilst in-country NATO troops have doubled since
2019
Trade links with Russia are minor, with exports representing only 3.6% of total exports in 2022 (4.4% in 2021)¹
A new coalition government took office on 17 April 2023 with sustainability of public financing a key objective
Strong and stable institutions and governance reflected in consistent high Worldwide Governance Indicator scores
Estonia has the best scores of any Western country in the latest PISA* student assessments
Estonian banking sector has one of the highest CET1 ratios in the EU (Q2 2023) - 23.2% vs an average of 15.7% in SSM*5
NPL ratios are among the lowest in the EU at 1% at the end of Q3 20236
Supervising authorities have upgraded supervision of anti-money laundering and crypto currency activities
Note: (1) Statistics Estonia; (2) Ministry of Finance of Estonia, Summer 2023 forecast. The forecasted numbers are subject to change; (3) 'ICT' refers to Information and
Communications Technology; (4) Eurostat; (5) European Banking Authority; (6) Estonian Financial Supervision and Resolution Authority; (*) NGEU: NextGenerationEU;
EMU: European Monetary Union; ECB: European Central Bank; PISA: Program for International Student Assessment; SSM: Single Supervisory Mechanism
REPUBLIC OF ESTONIA
MINISTRY OF FINANCEView entire presentation