Estonia: Economic growth decelerates in the second quarter
September 7, 2012
In the second quarter, GDP grew 2.2% over the same period last year, which was above August's flash estimate of 2.0% but below the 3.4% rise seen in the first quarter. The reading mainly reflected a slowdown in private consumption as well as in net exports. Moreover, a decline in inventories placed an additional downward drag on GDP growth. Private consumption slowed from a 4.1% expansion in the first quarter to a 1.9% rise in the second, whereas government consumption accelerated from a 3.4% rise in the first quarter to a 4.3% rise in the second. Fixed investment, on the other hand, grew an impressive 25.8% in the second quarter (Q1: +20.2% year-on-year). Exports of goods and services slowed from an 8.6% increase in the first quarter to a 4.3% expansion in the second, while imports similarly decelerated from a 9.3% rise in the first quarter to a 5.9% increase in the second. As a result, the external sector's net contribution to economic growth deteriorated from minus 0.4 percentage points in the first quarter to minus 1.1 percentage points in the second. A quarter-on-quarter comparison, however, does not corroborate the deceleration suggested by annual data, as GDP rose a seasonally and calendar-day adjusted 0.5% over the previous quarter, which was above the 0.2% rise tallied in Q1. The Central Bank sees the economy growing 2.6% this year and 3.6% in 2013.