Estonia: Economic growth revised upward
December 9, 2013
GDP expanded 0.7% in Q3 over the same period last year, according to revised data published by Statistics Estonia (SE) on 9 December. The reading was revised up from the 0.4% expansion reported in the flash estimate, but still represents a deceleration compared to the 1.1% rise recorded in Q2.
Growth in the third quarter was mainly driven by an expansion in fixed investment and in government consumption. Gross fixed investment rebounded to an 11.4% expansion in Q3 (Q2: -0.7% year-on-year). Government consumption increased 4.4% in Q3, up from the 0.1% contraction in Q2. Private consumption growth slowed from 5.6% to 3.9%.
On the external side, exports of goods and services dropped from a 5.3% expansion in Q2 to a 1.2% contraction in Q3. Imports increased 0.9% over the previous quarter, which was down drastically from the 8.4% expansion in Q2. As a result, the external sector's net contribution to economic growth rose from minus 2.8 percentage points in Q2 to minus 2.2 percentage points in Q3.
In seasonally and working-day adjusted terms, GDP was unchanged at plus 0.4% quarter-on-quarter, which contrasts the 0.2% contraction tallied in the second quarter.
The Central Bank expects GDP growth to reach 2.0% in 2013 and 4.2% in 2014. FocusEconomics Consensus Forecast participants see the economy growing 1.5% in 2013, which is down 0.2 percentage points from last month's estimate. In 2014, economic growth is expected to accelerate to 3.2%, which is down 0.3 percentage points from last month's forecast.
Author: Carl Kelly, Economist