Estonia’s economy grew by 0.6% last year

Estonia‘s economy grew by 0.6% in 2025, reaching €41.6 billion, with the country faring better last year than it did in the two preceding years, according to Statistics Estonia.

In the fourth quarter of the year, the country’s GDP growth was 0.7%, compared to the same period in 2024.

“The GDP showed growth in the last three quarters, and the annual GDP growth was 0.6%,” commented Robert Müürsepp, national accounts service manager at Statistics Estonia.

Fourth quarter growth

The largest contributor to economic growth in Estonia in the fourth quarter came from the manufacturing sector, in which value added grew by 13.3%, while the information and communication sector also had a ‘significant impact’, seeing 9% growth, despite a mid-year slump.

The trade sector, meanwhile, was a negative contributor to GDP for the third quarter in a row, with value added declining by 7.6%. The construction and health and social work sectors also weighed on GDP, the data showed, decreasing by 7.6% and 7.1% respectively.

Overall, value added across all sectors grew by 0.4% in the fourth quarter.

“In the non-financial corporations sector, value added was positive for the third consecutive quarter,” Müürsepp commented. “However, the value added of financial corporations has now been in decline for four quarters.”

Noting that the value added of the general government sector showed marginal growth at 0.9% in the fourth quarter, he added that “this is the weakest result for this sector since the first quarter of 2022. The value added of the non-profit institutions sector decreased for the second quarter in a row (-1.8%), which is the sector’s worst result since the first quarter of 2023.”

Net taxes on products rose 3% in Q4, largely due to VAT receipts, contributing alongside value added to roughly half of GDP growth.

Private consumption decreased slightly by 0.4% in the final quarter, driven by lower spending on transport and alcohol and tobacco, while households increased their expenditure on financial and insurance services, recreation, furnishings, clothing, and communication.

Elsewhere, investments rose 6.9% in the quarter, boosted by households investing in dwellings (up 22.8%) and non-financial corporations in other buildings (up 42.8%).

2025 performance

Looking at 2025 as a whole, value added increased by 0.3%, with investments up by 3.2% and exports and imports both rising by 5%. Manufacturing, information and communication, and real estate activities had the biggest positive effect on full-year GDP performance.

‘Private consumption remained at the level of 2023 last year, as it did the year before,’ Statistics Estonia noted. ‘Looking at households’ expenditures, the biggest rise in 2025 occurred in expenditures on financial and insurance services. There was also a notable increase in spending on furnishings, recreation, information and communication, and education. The biggest decreases were recorded in expenditures on transport, alcoholic beverages and tobacco, and restaurants and accommodation services.’ Read more here.