Estonia GDP Q1 2016


Estonia grows robustly in the first quarter of 2016

In the first quarter, GDP increased 1.7% over the same quarter of the previous year, according to the revised data Statistics Estonia (SE) published on 9 June. The reading confirmed the figure reported in the flash estimate and represented a steep acceleration over the 0.7% increase recorded in Q4 2015. Q1’s expansion, which was the highest since Q4 2014, was mainly driven by a robust domestic demand while the external sector deteriorated over the previous quarter.

On the domestic side, private consumption increased 5.6% in Q1, which marked a significant acceleration over the2.0% increase tallied in the previous quarter. Government consumption decelerated from a 3.3% expansion in Q4 2015 to a 1.0% increase in the first quarter, which marked the slowest increase since Q4 2013. Conversely, gross fixed investment declined 5.8% in Q1, which was a more pronounced contraction than the 0.4% fall observed in Q4.

On the external side, exports of goods and services fell 0.9% in Q1 (Q4: -1.9% year-on-year). On the other hand, imports swung from a 1.0% contraction in the fourth quarter to a 2.7% increase in the first quarter. Owing to the expansion in imports and the contraction in exports, the external sector’s net contribution to overall economic growth deteriorated from minus 0.8 percentage points in Q4 to minus 3.1 percentage points in Q1.

In seasonally- and working-day adjusted terms, GDP increased 1.2% quarter-on-quarter in Q4, which matched the expansion tallied in Q4 2015.

The Central Bank expects GDP growth to reach 2.2% in 2016 and 3.1% in 2017. FocusEconomics Consensus Forecast participants see the economy growing 2.2% in 2016, which is unchanged from last month’s estimate. In 2017, economic growth is expected to accelerate to 2.6%.

Author:, Economist

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Estonia GDP Chart

Estonia GDP Q1 2016 2

Note: Year-on-year changes of GDP in %.
Source: Statistics Estonia and FocusEconomics Consensus Forecast.

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