As a member of the European Union, Estonia is considered a high-income economy by the World Bank. The GDP (PPP) per capita of the country, a good indicator of wealth, was in 2013 $23,144 according to the IMF. between that of Slovak Republic and Latvia, but below that of other long-time EU members such as Greece or Spain. The country is ranked 11th in the 2014 Index of Economic Freedom, and the 4th freest economy in Europe. Because of its rapid growth, Estonia has often been described as a Baltic Tiger beside Lithuania and Latvia. Beginning 1 January 2011, Estonia adopted the euro and became the 17th eurozone member state.
According to Eurostat, Estonia had the lowest ratio of government debt to GDP among EU countries at 6.7% at the end of 2010. The world media has lately started to describe Estonia as a Nordic country, emphasising the economic, political and cultural differences between Estonia and its less successful Baltic neighbours.
A balanced budget, almost non-existent public debt, flat-rate income tax, free trade regime, competitive commercial banking sector, innovativee-Services and even mobile-based services are all hallmarks of Estonia's market economy.
Estonia produces about 75% of its consumed electricity. In 2011 about 85% of it was generated with locally mined oil shale. Alternative energy sources such as wood, peat, and biomass make up approximately 9% of primary energy production. Renewable wind energy was about 6% of total consumption in 2009. Estonia imports petroleum products from western Europe and Russia. Oil shale energy, telecommunications, textiles, chemical products, banking, services, food and fishing, timber, shipbuilding, electronics, and transportation are key sectors of the economy. The ice-free port of Muuga, near Tallinn, is a modern facility featuring good transshipment capability, a high-capacity grain elevator, chill/frozen storage, and new oil tanker off-loading capabilities. The railroad serves as a conduit between the West, Russia, and other points to the East.
Estonia today is mainly influenced by developments in Finland, Sweden and Germany, its three largest trade partners. The government recently increased its spending on innovation by a considerable amount. The prime minister of Estonian Reform Party has aimed to raise Estonian GDP per capita to one of the EU's highest by 2022, even though today it is still below EU average.
Because of the global economic recession that began in 2007, the GDP of Estonia decreased by 1.4% in the 2nd quarter of 2008, over 3% in the 3rd quarter of 2008, and over 9% in the 4th quarter of 2008. The Estonian government made a supplementary negative budget, which was passed by Riigikogu. The revenue of the budget was decreased for 2008 by EEK 6.1 billion and the expenditure by EEK 3.2 billion. In 2010, the economic situation stabilised and started a growth based on strong exports. In the fourth quarter of 2010, Estonian industrial output increased by 23% compared to the year before.
According to Eurostat data, Estonian PPS GDP per capita stood at 67% of the EU average in 2008. In March 2011, the average monthly gross salary in Estonia was €843.
However, there are vast disparities in GDP between different areas of Estonia; currently, over half of the country's GDP is created in Tallinn. In 2008, the GDP per capita of Tallinn stood at 172% of the Estonian average, which makes the per capita GDP of Tallinn as high as 115% of the European Union average, exceeding the average levels of other counties.
The unemployment rate is around 11.7%, which is above the EU average, while real GDP growth in 2011 was 8.0%, five times the euro-zone average. In 2012, Estonia remained the only euro member with a budget surplus, and with a national debt of only 6%, it is one of the least indebted countries in Europe.