Trade and services

​The Soviet deficit economy was quickly followed by the growth of commerce and service in Estonia; a lot of things hadn’t been available before, and some goods or services weren’t even the stuff of dreams. In 2006-2007 there was a buying boom in Estonia, although the public was generally unaware of it. The spending spree was followed by the economic crisis, growth in unemployment, and a decrease in income, so consumers started to spend a lot less. The decrease in earnings wasn’t the only reason that people cut their expenses: the importance of saving and smart consumption was rediscovered. For this reason, the buying of ready-made food, many convenience services etc. shrank dramatically, and all kinds of tricks of economic consumption became very popular. Despite the shift towards more nature-friendly behavior, the improvement in the economy has increased consumption to some extent.

​During the period of fast growth, an extremely fast concentration took place in commerce: small local shops were replaced by super- and hypermarkets, where families sometimes spend whole bank holidays. Retail merchants from abroad made diligent attempts to win the market: from Finland and Sweden, but also from Lithuania, Germany etc. Still, local chains have survived on the market. The economic crisis had a drastic effect on many small stores, increasing even more the role of bigger shopping centers. On the other hand, people took up gardening, and spending one’s free time at a country home is becoming more popular. Outdoor markets have become more popular, as has buying food directly from farmers.

​In the times of fast economic growth, the provision of all kinds of services quickly blossomed: from personal care services (hairdressers, beauticians, dentists etc.) to sports and entertainment. The growth in tourism increased food and accommodation profits, and local tourism also increased. In rural areas, cottage tourism and eco-tourism gained popularity. The economic crisis halted the growth abruptly and in many fields the downturn was very steep – for instance, some recreation facilities closed temporarily – but the improving economic situation has already increased profits from products and services. The recent increase in tourism has played an important role.

​As the economy has improved, it has become more attractive to establish companies that offer various services related to business and real estate. The private sector has gradually increased its participation in education, health care and social care. Many service companies work mostly with foreign enterprises or visitors from abroad, whether the services are targeted to ordinary persons or firms. About 37% of exported services come from other areas than transport or tourism. Most of it comes from business services, services connected with info technology and communication, and construction. Offering private services in health care and social care has increased. In addition to dentistry and recovery therapy, where servicing foreign tourists started as early as the 1990s, Estonian hospitals offer more and more treatment services. But the purchase of services by Estonian citizens and companies has grown even more than tourist purchases. So occupational, scientific and technical, administrative and related activities, mostly targeted to business, have increased through the years. Since the global financial crisis, the role of the finance sector in the economy has decreased to a more common level of 3.5% of GDP, although the percentage never significantly exceeded 4%.

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