Abstract
Estonia, as a new member of the World Trade Organization and the European Union, has transitioned effectively to a modern market economy with strong ties to the West, including the pegging of its currency to the euro. The economy benefits from strong electronics and telecommunications sectors and is greatly influenced by developments in Finland, Sweden, and Germany, three major trading partners. The current account deficit remains high, at about 14 percent of GDP in 2004. However, the state budget enjoyed a surplus of $130 million in 2003. Since its accession to independence in 1991, Estonia didn't stop to advance on its way to become an industrialized country and in the space of 10 years, a country of 1,3million people and having nearly the size of Netherlands has gone from being part of a closed and inefficient economy to being acclaimed as the leading transition economy of the former socialist bloc and as one of the most promising economies in the world according to some economic ranking.
