Estonia GDP


Estonia: GDP growth slightly less than previously estimated in Q1

June 10, 2015

GDP increased 1.1% in Q1 over the same period of the previous year according to the revised data Statistics Estonia (SE) published on 9 June. The reading was revised down a notch from the 1.2% expansion reported in the flash estimate and represented a notable deterioration from the 3.0% increase recorded in Q4.

Q1’s reading, which marked a one-year low, was mainly driven by a deceleration in domestic demand, while the external sector improved compared to last quarter. On the domestic side, growth in private consumption slowed from 3.9% in Q4 to 2.6% in Q1, which marked an almost two-year low. Government consumption also fell from a 5.3% increase in Q4 to a 1.6% rise in Q1. Meanwhile, gross fixed investment declined 7.7% in Q1, which was a more pronounced contraction than the 7.1% fall observed in Q4.

On the external side, exports of goods and services slowed significantly from a 7.3% increase in Q4 to a 2.1% rise in Q1. Meanwhile, imports contracted 1.3%, which notably contrasted the 5.3% expansion recorded in Q4. As a result, the external sector’s net contribution to overall economic growth increased from 1.7 percentage points in Q4 to 2.9 percentage points in Q1.

In seasonally- and working-day adjusted terms, GDP fell 0.3% quarter-on-quarter in Q1, which matched the flash estimate and notably contrasted the 1.0% expansion tallied in the fourth quarter.

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

Author: Angela Bouzanis, Senior Economist

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Estonia GDP Chart

Estonia GDP Q1 2015 0

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

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