Estonia: Economic growth revised downward in September
September 9, 2013
GDP expanded 1.0% in Q2 over the same period last year, according to revised data published by Statistics Estonia (SE) on 9 September. The reading was revised down from the 1.3% expansion reported in the flash estimate and also represents a decrease over the 1.3% rise recorded in Q1.
Growth in the second quarter was mainly due to an expansion in private consumption, which rose from 4.3% in Q1 to 5.6% in Q2. Government spending contracted 0.1% over the previous quarter (Q1: +0.4% year-on-year). Gross fixed investment fell 0.7% in the second quarter although the decline was notably less than the 7.7% drop registered in the first quarter.
On the external side, exports of goods and services accelerated from 4.4% growth in Q1 to 5.3% in Q2. Nevertheless, imports expanded 8.4% over the previous quarter (Q1: 3.4% yoy) and as a result the external sector's net contribution to economic growth fell from plus 0.9 percentage points in Q1 to minus 2.8 percentage points in Q2.
In seasonally and working-day adjusted terms, GDP was revised down from plus 0.1% to minus 0.2% quarter-on-quarter, which follows the 1.0% contraction tallied in the first quarter.
The Central Bank expects GDP growth to reach 2.0% in 2013 and 4.2% in 2014. FocusEconomics Consensus Forecast participants see the economy growing 2.3% in 2013, which is down 0.5 percentage points from last month's estimate. In 2014, economic growth is expected to accelerate to 3.6%.
Author: Carl Kelly, Economist