Estonia to catch up Scandinavia in next 10-15 years

Updated: 30 September, 2016 seen 3,092

I have red some interesting article on Estonian Public Broadcasting ( in which  professor of economics, at Tartu University, Raul Eamets predicts that it will take 10-15 years for Estonian incomes to catch up with those of Nordic countries

Income level is not the same as GDP, but knowing GDP we can tell something about income level, isn't that right?  I decided to make some quick GDP comparison levels of Nordic countries and Estonia.I don't know which countries Estonian economics professor counted as Nordic countries,  but for the ease of continuing mathematical theories (my lame Google Spreadsheet graphs), I'll assume = Iceland, Sweden, Norway, Denmark and Finland are counted as Nordic countries,

Current (2012) GDP nominal in Estonia vs Nordic Countries



Here are the raw GDP nominal 2012 data from World Bank:

  • Estonia 21.854 bln USD
  • Iceland 13.656 bln USD
  • Finland 250.024 bln USD
  • Denmark 314.242 bln USD
  • Norway 499.667 bln USD
  • Sweden 525.742 bln USD
Well,  Estonia has outperformed one Nordic country in terms of GDP - Iceland. Good for you Estonia. But what is the gap with 3rd placed Finland? 229 bln USD. Yup, that's right, to outperform Finland, Estonia needs to find another 229 bln USD, or to increase their current GDP 10 times. OK, ok, you are right. Finland has more population than Estonia, and Iceland has less than Estonia. So this is not how we should measure.
Lets take a look, how should we probably measure then:
Here are the raw GDP per capita 2012 data from World Bank:
  • Estonia 16.316 thousands USD
  • Iceland 42.658 thousands USD
  • Finland 46.178 thousands USD
  • Denmark 56.210 thousands USD
  • Norway 99.557 thousands USD
  • Sweden 55.244 thousands USD
In this case Estonian GDP per capita is in last place, with distance to 4th placed, anf again Iceland 26 thousand USD per capita.
So what was the topic I started this blog post? Ah, I remembered - Estonia will reach Nordic countries average level in next 10-15 years.
Ok, sounds fair. Lets do some math a make an average Nordic countries GDP per capita: (42.658 + 46.178 + 56.210 + 99.557 + 55.244) / 5 = 59.96 thousands USD per capita.
59.96 thousands USD GDP per capita is average Nordic countries GDP per capita. Well,from data above, we can see, that Norway has very very high GDP per capita 99.55 thousands USD GDP per capita.
If the average GDP per capita value in Nordic countries in 2012 were  59,960 USD , then in Estonia it was 16,310.   43,650 USD for GDP per capita to go in next 10-15 years. In average each year Estonia should growth their GDP per capita by JSD 4,365 (if in ten years) or  2,910 (if in 15 years) to reach average 59,960 GDP per capita to be on the level of Nordic countries in 2012.
Oh yes,  I don't think Nordic country economies will stand by, to wait till Estonia will reach them, and outperform.
I'm not so confident to make another chart for such a long future,thus I can try to use data available on IMF GDPnominal forecast untill 2018.
Here is the raw data, GDP nominal data I made using IMF World GDP forecast report, by dividing each country with it's population (2012). Depending on population increase/decrease - data should be +/- correct:
  • Estonia 26.19 thousands USD
  • Iceland 59.45 thousands USD
  • Finland 62.06 thousands USD
  • Denmark 70.61 thousands USD
  • Sweden 76.23 thousands USD
  • Norway 121.56 thousands USD
Yes, indeed, according to IMF prognosis, Estonia will have significant GDP growth till 2018. In next 5 years Estonia will add additional 10 thousand USD per capita. But, so do will do other Nordic countries, and according to prognosis even more than 10 thousand USD.
Let's do math again:
(59.45+62.06+70.61+76.23+121.56)/5 = 77.982 thousands USD per capita.
In 2018, according to IMF prognosis, average GDP per capita in Nordic countries will be USD 77,982 USD, while in Estonia just USD 26,190. Gap will be already  USD 51,792. Additional 7 thousands than in 2012.
So what is the conclusion? Well of-course to believe in some prognosis for such a long term as 10-15 years is unreasonable. I doubt that even prognosis till 2018 we can rely on. But still, how can Estonia will achieve this? 


Hi! My name is Reinis Fischer (38), a proud dad and devoted husband. CEO and Founder of Terramatris crypto hedge fund, drone enthusiast, world traveler, photographer, and passionate lover of Georgian cuisine (vegetarian).

An ex-pat living in Georgia since 2011, I trade stocks, take photographs, work out at the gym, and many more. Here I write about travel, finance, and other things that might interest me.