According to initial figures from Statistics Estonia, economic growth was only 0.7 percent last year, and the economy stood still in the fourth quarter.
The Ministry of Finance, the Bank of Estonia and private banks had all forecast higher growth, expecting a minimum of 1 percent.
The main culprit in the decline in the year's meager growth was the transit sector.
The fourth quarter standstill was caused by the warm weather, which affected the energy industry negatively. Heat production was down a sixth compared to the same quarter in 2012.
Kaspar Oja of the Bank of Estonia said that business energy savings did not spill over to increased investments.
He said that foreign demand has shown signs of recovery lately, and manufacturing growth outpaced overall economy growth last year by a wide margin.
The Bank of Estonia is predicting 2.6 percent growth for the current year.