Estonia: GDP accelerates in Q2 at fastest pace since early 2013
September 8, 2014
GDP increased 2.4% in Q2 over the same period last year according to the revised data Statistics Estonia (SE) published on 8 September. The reading was revised up from the 2.2% expansion reported in the flash estimate and represents an acceleration over the modest 0.3% increase recorded in Q1. The second quarter result, which was the strongest since Q1 2013, was driven by a positive contribution from the external sector and strong private consumption. The GDP release for Q2 is the first to reflect the methodology of the new European System of National and Regional Accounts, known as ESA 2010. The methodology has also been applied to historical data.
On the domestic side, growth in private consumption increased 3.7% in Q2, which followed the 3.9% expansion registered in Q1. Conversely, government consumption decreased 0.4%, which contrasted the 1.3% increase tallied in Q1. Meanwhile, gross fixed investment tumbled to a 0.7% increase in Q2 (Q1: 10.5% year-on-year).
On the external side, exports of goods and services picked up from a flat reading in Q1 to a 0.6% increase in Q2, which marked the highest reading in four quarters. Meanwhile, imports declined 0.7% over the same period of the previous year, which contrasted the 2.5% increase recorded in Q1. As a result, the external sector’s net contribution to overall economic growth swung from minus 2.2 percentage points in Q1 to plus 1.2 percentage points in Q2.
GDP increased 0.5% quarter-on-quarter on seasonally- and working-day adjusted terms, which contrasted the 1.2% drop tallied in the fourth quarter.
Author: Carl Kelly, Economist