Analytics - 2023

This year's TOP101 mirrors changes in the Estonian economy

According to Eesti Pank's latest economic forecast, the Estonian economy will grow next year, but after a two-year recession, the recovery will be slow. On a positive news, prices should not be increasing as rapidly as before. Central bankers forecast that the Estonian economy will contract 2.2% in 2023, but grow 1.4% in 2024. Inflation growth that is expected to average 9.4% this year should slow to 3.4% next year. To put it mildly, 2023 was a truly challenging year for both the Estonian economy and the government. The economy's stress level has been pushed by inflation, raising interest rates, the cooling of the Finnish and Swedish economies, the instability resulting from the Russian-Ukrainian war and the government's attempt to balance the budget through tax rises. As of October 26, the Dow Jones Index had fallen by about 10% since the beginning of the year. The Nasdaq Tallinn index has fallen by about 20% and the S&P 500 is down by about 15%.

TOP 101 values and GDP Estonia (current prices), billion EUR

This year's total value of the 101 Estonia’s most valuable enterprises has increased slightly compared to last year and amounted to 31 billion euros. In comparison, Estonia's GDP was 36 billion euros in current prices in 2022. Growing prices affected GDP growth in current prices, while inflation had a dampening effect on the total value of the companies in TOP101.

Last year's trends have continued in 2023 when in the second quarter the economy contracted most compared to the first quarter in Poland (2.2%) and Sweden (0.8%). By contrast, Lithuanian GDP grew by 2.9% quarter on quarter, the largest growth in the euro area. Estonia's economy contracted 0.3% in the same period. Estonian inflation in 2022 was 19.2%. Although price growth has been slowing down, the Bank of Estonia still expects prices to grow 9.2% for 2023. In order to contain inflation, the European Central Bank has aggressively raised interest rates, which have started to have an impact on consumption and thus on inflation. By 2024, price growth is expected to stagnate at normal levels, and interest rates should stabilize or, according to some optimists, even fall.

Industry comparison (%)

This year's TOP101 also differs in terms of sectors. For instance, the share of the real estate sector has increased by about 0.68 percentage points (pp), but this is likely to change in the next year's ranking. The natural resources sector has also grown by 0.5 pp (State Forest Management Center) due to high wood prices. Also, the share of the transport and logistics sector grew by 0.22 pp. Production sector is in the downward spiral, and the share of the consumer goods sector which mainly consists of food and beverage producers fell by 0.48 pp. The main reason for the sector's decline is the fall in the ranking of some production companies. Also, the share of the sector of energy carriers decreased, due to the fact that Kirde Varad (VKG) did not submit a financial report.

TOP 101 threshold, million EUR

In 2022 the minimum value for a company to be included in the TOP101 ranking was 84.36 million euros. In the 2023 ranking, the threshold was 84.25 million euros, or practically unchanged compared to the previous year. In this year's TOP101 nine companies had exceeded a billion euros in value while in 2022 TOP101 there were eight such companies. However, such well-known companies as AS Kirde Varad (VKG), Tiigi Keskus and Circle K are missing from the 2023 TOP101 ranking, as the reports of these companies had not been submitted to the registry by the ranking compilation deadline (15 October 2023). In addition, Maag Grupp and Liviko dropped out from the ranking.