Estonia: Economic growth confirmed in the fourth quarter
March 11, 2013
In the fourth quarter, GDP grew 3.7% over the same period of the previous year, which was line with February's flash estimate and slightly above the 3.5% rise seen in the third quarter. In the full year 2012, the economy expanded 3.2%, well below the robust 8.3% growth rate tallied in 2011.
The reading mainly reflected an improvement in domestic demand, buoyed by an increase in inventories as well as government consumption. Private consumption grew 5.3% in the fourth quarter (Q3 2012: +6.5% year-on-year), while government consumption accelerated from a 0.8% rise in the third quarter to a 6.5% expansion in the fourth. Fixed investment, on the other hand, slowed from an impressive 33.8% expansion in the third quarter to a 7.6% increase in the fourth.
Exports of goods and services rose 7.1% (Q3: +2.9% yoy), while imports added 12.2% (Q3: +8.9% yoy). As a result, the external sector's net contribution to economic growth remained negative but improved from minus 5.4 percentage points in the third quarter to minus 4.2 percentage points in the fourth.
A quarter-on-quarter comparison, however, does not corroborate the acceleration suggested by annual data, as GDP rose a seasonally and calendar-day adjusted 0.9% over the previous quarter, which was below the 1.6% rise tallied in Q3.
The Central Bank expects GDP growth to reach 3.0% this year and 4.0% in 2014. FocusEconomics Consensus Forecast participants see the economy growing 3.1% in 2013, which is down 0.1 percentage points from last month's estimate. In 2014, economic growth is expected to accelerate to 3.8%.