Estonian Economy

April 2008
• Estonia has retained its 20th place in the Networked Readiness Index (NRI) published by the World
Economic Forum as part of its Global Information Technology Report 2007-2008. Lithuania has
climbed to place 33 from place 39 in the survey published a year ago while Latvia has slid from place 42 to 44.
Published for the seventh consecutive year with a coverage of 127 economies worldwide, the report offers a
comprehensive and authoritative international assessment of the impact of ICT on the development process
and the competitiveness of nations. Among the 12 new members of the EU, countries such as Estonia (20th),
Slovenia (30th), Lithuania (33rd), the Czech Republic (36th), and Hungary (37th) have made remarkable
progress in networked readiness, as well as general competitiveness, over the last two decades. Among these
countries, Estonia, the tiny homeland of Skype, has benefited from a savvy e-leadership from a government
that has fostered innovation and universal ICT access as a platform for improved competitiveness. Another
Baltic state, Lithuania, realizes one of the biggest improvements, by six positions, in Europe from last year. The
top six countries on the scoreboard for 2007-2008 are Denmark, Sweden, Switzerland, the United States,
Singapore and Finland, in that order.
• Estonian companies and individuals have registered more than 6,500 .eu domain names in the first
two years of its existence. The .eu web domain is a relatively new thing, but nevertheless interest in it is great
in Estonia. Both entrepreneurs and private individuals regard the .eu domain as a good alternative for the
generic .com, .net and .org Internet addresses and Estonia's top-ranking domain .ee whose registration
conditions are still conservative. Registration for the European .eu web domain opened on April 7, 2006. Since
then, the domain has picked up nearly three million customers.
MEDIA. TELECOMMUNICATIONS
• The Estonian government endorsed amendments to the Broadcasting Act, which among other things
brings the date of switching off analog ground wave television forward to June 2010. The state had
earlier set the final date of transition to digital television to before the beginning of 2012. As a result the
government is planning to bring the switch forward by one and a half a years. There are currently about
160,000 families receiving TV signal by their own arials in the analog system. On transition to digital television
these families must acquire equipment enabling digital reception of TV picture.
REAL ESTATE
• According to the Colliers International real estate survey, despite office premises being added to the
existing ones in Tallinn no glut of the market is to be expected in the city this year. The projects being
built are mainly covered with preliminary contracts and the level of absorption remains high. However, as a
result of toughening competition a rise in the level of vacancies and a slowdown in the growth in rental prices
is to be expected. New developments of office premises will overwhelmingly be completed on the outskirts
and business activity is concentrating in new areas outside the city center. Due to the shortage of new plots in
the city center and continued high demand for A Class office premises owners have started reconstruction of
existing office buildings in the city center. Growth in the offer of new office premises has led to the rise of
vacancies; by the end of 2007 the vacancy rate of B class premises was 5.3 percent while the average vacancy
rate of A class premises continued to be very low -- about 1.9 percent.
TOURISM
• In February 72,000 foreign tourists stayed in Estonian accommodation establishments, which is 7,000
more than in the same month last year. Compared to February 2007, the number of tourists from Finland,
Russia, Latvia and Lithuania increased. Typically of winter months, Estonian residents made up half of
accommodated tourists. Their number grew by about 4,000 compared to February 2007. In February 678
accommodation establishments with 16,200 rooms and 34,400 beds were available to tourists. The room
occupancy rate was 36 percent. The average cost of a guest night was 457 kroons (EUR 29.2), up by 6 percent
year-on-year. A guest night in Tallinn cost on the average 571 kroons, in Tartu 415 kroons and in Parnu 326
kroons. In large accommodation establishments with more than 100 rooms, the average cost of a guest night
was 516 kroons.
TRANSPORT
• Tallink is looking for possibilities to improve the result of the Finland-Germany route, given the
combined effect of its length and the rise in fuel costs. Increased fuel prices have put pressure to the
group results. Costs for fuel have climbed by approximately 297 million kroons (EUR 19 mln) during the first
half-year, marking a rise of 47 percent. Given its length and speed of the service, almost half of the increase in
fuel costs came from the Finland-Germany route. As a result of higher fuel costs and lower cargo volumes
resulting from tougher competition in cargo transportation, the result of the Finland-Germany operation has
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