In the fourth quarter of 2025, Estonia’s gross domestic product grew by 0.7% compared with the same period of 2024; GDP growth in 2025 as a whole was 0.6% year on year, which was better than the two preceding years.

The GDP at current prices amounted to €11 billion in the fourth quarter of last year and to €41.6 billion in 2025 as a whole.

Robert Müürsepp, the national accounts service manager at Statistics Estonia, the country’s official statistics agency, said that 2025 was a better year for the Estonian economy than the previous two years. 

“The GDP showed growth in the last three quarters, and the annual GDP growth was 0.6%,” he said.

Similarly to the third quarter, the contribution of most economic activities to the GDP remained modest. Manufacturing was the biggest positive contributor, as its value added increased by 13.3%. Information and communication also had a significant impact – its value added recovered from the mid-year slump and grew by 9%.

The trade sector was a negative contributor for the third quarter in a row, with its value added decreasing by 7.6%. Other activities that had a considerable negative impact on the GDP were construction (-7.6%) and human health and social work activities (-7.1%).

Contribution of economic activities to GDP growth, Q4 2025. Chart by Statistics Estonia.

People spend less on booze and transport

In the fourth quarter, value added grew by 0.4%. Value added is the total output of enterprises after taking away the value of inputs used for production. 

“In the non-financial corporations sector, value added was positive for the third consecutive quarter. However, the value added of financial corporations has now been in decline for four quarters,” Müürsepp said, noting that the value added of the government sector showed marginal growth at 0.9%.

Net taxes on products increased by 3% in the fourth quarter, mainly on account of VAT receipts. Both value added and net taxes on products accounted for about half of GDP growth.

In the fourth quarter, private consumption declined by 0.4%. This was mainly due to decreased spending on transport and on alcoholic beverages and tobacco. There was an increase in households’ expenditures on financial and insurance services, recreation and furnishings. A slight increase also occurred in expenditures on clothing and footwear, and information and communication.

Investments grew by 6.9% in the fourth quarter, which was the best quarterly result last year. The main drivers were non-financial corporations’ investments in other buildings and structures (42.8%) and households’ investments in dwellings (22.8%). The biggest negative contributors were non-financial corporations’ investments in machinery and equipment (-42%) and general government investments in other buildings and structures (-12.7%).

Car imports decline

Foreign trade continued to grow in the fourth quarter: exports were up by 4.7% and imports by 3.1%. “Net exports were €183.2 million – the strongest result since the first quarter of 2023,” Müürsepp said.

In trade in goods, exports rose by 4.1% and imports by 2.3%. There was a significant increase in trade in coke and refined petroleum products, gold for non-monetary purposes, fabricated metal products, computers and electronic products and electrical equipment. Imports of motor vehicles had the biggest negative impact on trade in goods.

In trade in services, exports grew by 5.6% and imports by 4.8%. This was primarily driven by sales and purchases of advertising and polling services and other business services.

The seasonally and working-day adjusted GDP decreased by 0.1% compared with the third quarter of 2025 and increased by 0.8% compared with the fourth quarter of 2024. 

Value added was up by 0.3% in 2025 as a whole. Last year, value added decreased by 0.2% in the non-financial corporations sector and by 0.4% in the financial sector. By contrast, the value added of the general government sector grew by 2.3%. For the first time in three years, the value added of the non-profit institutions sector declined in 2025 by 0.4%.

GDP growth compared with the same period of the previous year, Q1 2005 to Q4 2024. Chart by Statistics Estonia.

More money goes to recreation and insurance

The main positive contributors in 2025 were manufacturing and information and communication.

Of the larger sectors, real estate activities also provided a significant boost to the economy. In 2025, the main activities that hampered economic growth were trade as well as transportation and storage, and construction. 

Private consumption remained at the level of 2023 last year, as it did the year before. Looking at households’ expenditures, the biggest rise in 2025 occurred in expenditures on financial and insurance services. There was also a notable increase in spending on furnishings, recreation, information and communication, and education. The biggest decreases were recorded in expenditures on transport, alcoholic beverages and tobacco, and restaurants and accommodation services.

In 2025 as a whole, net taxes on products increased by 2.9% and investments by 3.2%. Investments were driven by the government sector where investments were up by 11.1%. Investments in other machinery and equipment and weapons systems grew the most (73.2%).

Exports and imports both grew by 5% last year. Net exports totalled €401.6 million by the end of 2025, representing the biggest trade surplus for Estonia since 2019.