Economy
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Estonian Economic Recovery Stalls as Quarterly Growth Hits Zero
Estonia's economy registered a 1% year-on-year GDP increase in the fourth quarter of 2025 but recorded zero growth compared to the previous quarter, as declining purchasing power from tax hikes and inflation tempers a full recovery.
- —Estonia's Gross Domestic Product (GDP) saw a 1% increase in the fourth quarter of 2025 compared to the same period in 2024, according to preliminary estimates from Statistics Estonia.
- —While the annual comparison indicates some improvement, the quarter-on-quarter trend showed no growth, with seasonally and calendar-adjusted GDP remaining at the same level as the previous quarter.
- —Analysts note that while the economy is recovering from a decline, most sectors are still showing slight negative added value, and purchasing power has decreased due to tax increases and price growth.
- —Investment levels remain subdued, though the real estate market has seen some activation due to stabilizing loan interest rates.
- —Consumer confidence began to improve in the final months of 2025, with expectations for stronger economic growth in 2026 driven by increased private consumption and government spending.
Recap
Estonia's preliminary Q4 2025 GDP figures point to economic stabilization, not a robust recovery. The 1% annual growth masks a complete stall in quarter-on-quarter momentum, with widespread sectoral weakness and diminished consumer purchasing power revealing a fragile foundation. Future growth hinges entirely on a projected, but not yet realized, increase in private and government spending.