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Estonia Private consumption

Estonia Private consumption

Private Consumption in Estonia

Estonia recorded an average growth rate of 3.8% in private consumption in the decade to 2022, above the 1.0% Euro Area average. In 2022, private consumption growth was 2.3%. For more private consumption information, visit our dedicated page.

Estonia Private consumption Chart

Note: This chart displays Private Consumption (annual variation in %) for Estonia from 2013 to 2022.
Source: Statistics Estonia.

Estonia Private consumption Data

2018 2019 2020 2021 2022
Private Consumption (ann. var. %) 4.7 4.6 -1.5 9.3 2.3

GDP records sharpest contraction since Q4 2022 in Q3

GDP declined at a quicker pace of 3.9% year on year in the third quarter, below the 2.9% contraction seen in the second quarter. Q3's reading marked the worst reading since Q4 2022. On a seasonally adjusted quarter-on-quarter basis, GDP declined 1.3% in Q3, following the previous quarter's 0.6% fall. Q3's quarter-on-quarter decline marked the largest decrease since Q4 2022.

Q3’s deterioration stemmed largely from an abysmal performance of the external sector, coupled with prolonged malaise in private spending and weaker public consumption. Household spending declined at a milder rate of 2.4% year on year in Q3 compared to a 3.0% contraction in Q2. Tight monetary conditions and elevated inflation likely ate into household budgets. Miscellaneous goods, clothing and footwear, and recreation and culture saw the largest drops in spending. Additionally, public spending dropped at the sharpest pace since Q2 2023, contracting 0.6% (Q2: +1.8% yoy). Meanwhile, fixed investment bounced back, growing 9.8% in Q3, contrasting the 18.7% decrease logged in the previous quarter. Meanwhile, the external sector weighed heavily on the overall figure against a backdrop of muted EU demand: Exports of goods and services contracted 12.1% in Q3, marking the worst reading since Q2 2020 (Q2: -5.4% yoy). Conversely, imports of goods and services dropped at a slower rate of 6.0% in Q3 (Q2: -8.4% yoy).

Mihkel Nestor, analyst at SEB, commented on the outlook: “Estonia’s export-dependent economy has been hard hit by low demand in the Nordic countries, but a broad-based decline in domestic demand is now also suppressing growth. […] The low tide in foreign trade is especially troublesome for Estonia’s manufacturing sector, which exports most of its output. […] A quick turnaround seems unlikely as new orders dwindle. Being the biggest economic sector in terms of value added and employment, its downturn is affecting many other parts of the economy. A notable recovery of exports will not happen before 2025.”

Consensus Forecasts and Projections for the next ten years

How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects Estonian private consumption projections for the next ten years from a panel of 10 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts and averaged to provide one Consensus Forecast you can rely on for each indicator. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable private consumption forecast available for Estonian private consumption.

Download one of our sample reports to visualize what a Consensus Forecast is and see our Estonian private consumption projections.

Want to get access to the full dataset of Estonian private consumption forecasts? Send an email to info@focus-economics.com.

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