The first six months brought 2.08 billion kroons ($155.7 million) worth of direct foreign investments to the country, with Finland (790 million kroons), Sweden (357.9 million kroons) and Great Britain (189.6 million kroons) being the largest investors.
The trend has continued form last year, when Estonia had recorded the largest foreign investment since 1994.
"The tendencies have been very positive, indeed, despite the fact that investments in the sectors of transport, warehousing and communications have decreased compared to the first half of 1997," said Agu Remmelg, director of the Estonian Investment Agency.
The share of Denmark, Norway and Germany in direct investment has increased, primarily replacing Russia, which is suffering badly from the collapse of its economy.
"Though Estonia itself is to conquer some economic difficulties, our assessment of the local investment climate is positive," said Remmelg. "The Estonian Investment Agency predicts the same trend to continue in the second half of the year, so we hope the year's total to exceed that of 1997."
Direct foreign investments in Estonia are expected to be about 3.5 billion kroons in 1998, what would make a 3-million-kroon increase over the last year's record.
In the first six months, major foreign investments were attracted by Marat Group, which was sold to Finnish investors, and two Estonian media corporations, Ekspress Group and Postimees Group, which were taken over by two Swedish concerns, Marieberg and Schibsted.
The investment was boosted by the sale of the meat company Rakvere to the Finnish company HK Ruokatalo and by Swedish banks investing in Hansapank.
The British company United Terminals injected money into the construction of oil terminals in Estonia, and Britannic Estonia Ltd. invested in a modern saw mill.
"In the second half of the year we are expecting a positive development of Nitrofert's investment which was supposed to start construction of a methanol plant in Estonia in April 1998," Remmelg said. "The privatization of Estonian Railway and the final stage of Eesti Telekom's privatization should add some investment."
Remmelg said Estonia is aiming to furthermore enhance the conditions for foreign investors.
"But under the unstable economic conditions, which have spread nearly all over the world, enhancing Estonia's reputation will not suffice itself. We need to cooperate within the entire Baltic Sea region," he said.
At the end of September, Sweden hosted the first meeting of the investment promotion agencies of this Baltic Sea region to stimulate foreign direct investments in the region of Northern Europe.
"The countries of the Baltic Sea region are both partners and competitors for foreign investments," said Kai Hammerich, director general of the Invest in Sweden Agency. "But by strengthening the visibility of the Northern European region as a whole, every single country improves its opportunity to attract more foreign investments."
According to Remmelg the Baltic investment agencies, as well as those of the St. Petersburg region in Russia, have understood the importance of cooperation and have made the first steps.
Remmelg said the next meeting will be held in June 1999, where the Baltic Sea countries can already make some serious plans and evaluate their achievements.