Estonia: Q4 economic growth revised upward
March 11, 2014
GDP expanded 0.3% 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 from the flat growth reported in the flash estimate, but still represents a deceleration compared to the 0.7% rise recorded in Q3. The deceleration in the fourth quarter was mainly driven by weaker domestic demand. Private consumption growth slowed from 3.9% in Q3 to 3.0% in Q4. Similarly, government consumption slowed from a 4.4% expansion in Q3 to a 1.1% increase in Q4. Moreover, gross fixed investment plummeted to a contraction of 1.2% in Q4 (Q3: +11.4% year-on-year). On the external side, exports of goods and services stepped up slightly from a 1.2% contraction in Q3 to a 0.8% fall in Q4. Imports, however, decreased 2.0% over the same period of the previous year, which contrasted the 0.9% increase recorded in Q3. As a result, the external sector's net contribution to overall economic growth swung from minus 2.2 percentage points in Q3 to plus 1.2 percentage points in Q4. GDP fell 0.1% quarter-on-quarter on seasonally- and working-day adjusted terms, which contrasted the 0.6% expansion tallied in the third quarter. The Central Bank expects GDP growth to reach 2.6% in 2014 and 3.9% in 2015. FocusEconomics Consensus Forecast participants see the economy growing 2.7% in 2014, which is down 0.1 percentage points from last month's estimate. In 2015, economic growth is expected to accelerate to 3.2%.
Author: Carl Kelly, Economist