Innovative progress in the digitalization of services and lighter restrictions than many other EU and European nations, including neighboring countries such as Latvia and Finland, have had a positive effect on Estonia’s economic recovery and growth. And the vaccination process that began in late 2020 and accelerated in the spring has done the same. Estonia is the only EU country where March 2020 forecast of a decline in GDP of more than 6% actually confirmed itself at 3% at the end of the year. Bank of Estonia has identified two categories of macro-level errors in its forecasts: those resulting from inaccurate assumptions at the international level and those relating specifically to Estonia. In addition, there is a faster-than-expected recovery from the restrictions, but also unexpectedly rapid growth in some sectors.

And although the at-risk-of-poverty rate in most EU countries has remained stable, it has increased in Portugal, Greece, Spain, Italy, Ireland, Slovenia, Bulgaria, Austria, and Sweden. At the same time, the average working income of the working-age population (18-64) in the EU decreased by 7% compared to 2019. Estonia was the only country where the risk of poverty among the working-age population (18-64 years) decreased, according to a Eurostat overview.

The main cause of job losses stems from the unprecedented increase in the number of people absent from work or short-time working hours. However, temporary measures to revive the economy have helped to offset the impact of the coronavirus pandemic. These temporary schemes have played an important role in stabilizing household wages and income, particularly for people on lower incomes.