Estonia’s real GDP will grow by 2.3% in 2026 and by 2.5% in 2027, according to the Ministry of Finance’s latest economic forecast, ERR reports. In subsequent years, the ministry expects the country’s GDP growth to slow down slightly. Finance Minister Jürgen Ligi noted that security and uncertainty were the prevailing factors at the moment. Under a baseline scenario, annual inflation will reach 4.0% in 2026 and 2.7% in 2027. However, if the impact of the war in the Middle East persists over a long term, inflation may reach 5.0% in 2026 and 3.2% in 2027. Meanwhile, the government’s budget deficit will widen to 4.3% of GDP in 2026 due to defence spending and income tax changes. The general government debt burden will rise from 26.7% of GDP in 2026 to 39% by 2030, the Finance Ministry projects.
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