Estonia’s economy is performing well, and public finances are in excellent shape, yet growth is softening and spending pressures from infrastructure needs and an ageing population are mounting. Efforts should now focus on improving income equality and well-being, greening growth and accelerating the country’s digital transformation, according to a new OECD report.

The latest OECD Economic Survey of Estonia notes Estonia’s expertise in information technology and its global head start in digitalising government services. Estonia now needs to accelerate and expand the digital transformation throughout the economy to lift productivity growth, which lags the OECD average.

This will mean equipping adults with the necessary skills, putting in place high-quality infrastructure, and helping industry and small businesses to adopt the right digital tools. With Estonia’s population ageing, like many other OECD countries, the Survey warns that a proposal to change pension legislation to enable the early withdrawal of savings from the second pillar of the pension fund should be reconsidered as it threatens economic stability and the adequacy of future retirement income.

Taking measures to raise the low levels of return on pension funds by improving their governance and transparency, would be a better course of action to ensure the sustainability of the pension system and reduce the risks of old-age poverty.

Read more @Mirage News