IMF Staff Country Reports

The Estonian economy is slowly re-emerging from a prolonged downturn but
faces structural challenges. Wages growing faster than productivity and permanent
increases in input costs, a legacy of previous shocks, are hindering price-sensitive
activities, while production with higher technological content is constrained by lack of
skilled labor and limited access to capital markets. Geopolitical developments, rising
defense spending needs, and preexisting fiscal imbalances pose significant hurdles.