Estonia GDP


GDP accelerates in Q4; posts moderate growth in full year 2014

GDP increased 3.0% in Q4 over the same period of the previous year according to the revised data Statistics Estonia (SE) published on 11 March. The reading was revised up a notch from the 2.7% expansion reported in the flash estimate and represented an acceleration over the 2.4% increase recorded in Q3. Q4’s expansion, which was the strongest since Q1 2013, was mainly driven by an acceleration in private consumption and government spending. Investment also improved somewhat compared to the strong contraction tallied in the previous quarter.

On the domestic side, growth in private consumption increased 5.8% in Q4, which represented an improvement compared to the 5.2% tallied in Q3. Government consumption accelerated from a 2.9% increase in Q3 to a significant 5.3% expansion in Q4, which marked the highest result since Q2 2008. Meanwhile, gross fixed investment declined 7.1% in Q4, which was a less pronounced contraction than the 9.8% fall observed in Q3.

On the external side, exports of goods and services jumped from a 4.8% increase in Q3 to a 6.0% expansion in Q4, which marked the highest reading in six quarters. Meanwhile, import growth jumped from Q3’s 2.9% to 5.9% in Q4. Since imports accelerated more than exports, the external sector’s net contribution to overall economic growth decreased from 1.7 percentage points in Q3 to 0.1 percentage points in Q4.

In seasonally- and working-day adjusted terms, GDP increased 1.1% quarter-on-quarter in Q4, which was notably above the mild 0.2% expansion tallied in the third quarter. In the full year 2014, GDP expanded 2.1%, which represented an improvement compared to the 1.6% increase registered in 2013, but was still far below the results in the three prior years.

The Central Bank expects GDP growth to reach 2.1% in 2015 and 3.3% in 2016. FocusEconomics Consensus Forecast participants see the economy growing 2.0% in 2015, which is down 0.1 percentage points from last month’s estimate. In 2016, economic growth is expected to accelerate to 2.8%.

Author:, Economist

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Estonia GDP Chart

Estonia GDP Q4 2014 1

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

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