## Republic of Estonia: Selected Issues

_IMF Staff Country Reports, July 14, 2025_

## Source details

**Canonical URL:** [Republic of Estonia: Selected Issues](https://www.imf.org/en/publications/cr/issues/2025/07/11/republic-of-estonia-selected-issues-568550)

## Other formats

- [Markdown version](/en/publications/cr/issues/2025/07/11/republic-of-estonia-selected-issues-568550/index.md)
- [Structured JSON version](/en/publications/cr/issues/2025/07/11/republic-of-estonia-selected-issues-568550/index.json)
- [Bundle manifest](/en/publications/cr/issues/2025/07/11/republic-of-estonia-selected-issues-568550/bundle-manifest.json)

## Bibliographic details
- Published: July 14, 2025
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798229017800.002

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### Purpose and focus
- Reexamines fiscal multipliers for Estonia with a view to highlighting policy trade-offs and providing growth-friendly options for fiscal consolidation.
- Asks whether recent measures have significant short-term effects on growth and seeks granular estimates of fiscal multipliers by type of instrument—on both revenue and spending—to shed light on potential short-term output costs and underpin policy advice on specific instruments for fiscal consolidation.
- Concludes: "The results indicate that multiplier effects in Estonia are not negligible."

### Recent economic and fiscal context
- The pandemic triggered a sharp and partly permanent increase in government spending.
- Demand for better quality and broader provision of public services has materialized.
- Climate and ageing-related spending pressures are set to intensify over time.
- Geopolitical risks have triggered a sharp increase in defense spending.
- Despite the 2022–2024 protracted recession, Estonian authorities implemented policy responses.

### Policy responses enacted
- Two rounds of wide-ranging tax changes affecting:
  - personal income tax
  - corporate income tax
  - value added tax
  - excises
- Spending cuts based on comprehensive spending reviews were enacted.

### Key analytical approach
- Uses granular estimates of fiscal multipliers by type of instrument for both revenue and spending to evaluate short-term output costs and to inform policy choices for consolidation.

### Subject areas and keywords (as listed)
- Subject: Corporate income tax, Income, Income and capital gains taxes, Income tax systems, Labor productivity, National accounts, Production, Taxes
- Keywords: Baltics, Corporate income tax, distribution of entrant firm, employment share, Europe, Global, IMF's Bucket Approach, Income, Income and capital gains taxes, Income tax systems, income taxation, Labor productivity, labor taxation

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## Content in this bundle

- **Republic of Estonia: Selected Issues; IMF Country Report No. 25/182; June 16, 2025**
  - [Republic of Estonia: Selected Issues; IMF Country Report No. 25/182; June 16, 2025 (Markdown version)](/-/media/files/publications/cr/2025/english/1estea2025002-print-pdf.pdf.md){rel="alternate" type="text/markdown"}
  - [Republic of Estonia: Selected Issues; IMF Country Report No. 25/182; June 16, 2025 (PDF)](/-/media/files/publications/cr/2025/english/1estea2025002-print-pdf.pdf){rel="external" type="application/pdf"}

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_Source: https://www.imf.org/en/publications/cr/issues/2025/07/11/republic-of-estonia-selected-issues-568550_