Estonia: Recovery gains traction
March 11, 2011
In the fourth quarter, GDP grew 6.7% over the same period the previous year. The result was a notch above the 6.6% expansion reported in the flash estimate and represented an acceleration compared to the 5.0% rise in Q3. Moreover, the fourth quarter figure marked the strongest reading since Q2 2007 and helped GDP to partially recover from the 13.9% contraction in 2009, growing 3.1% in the full year 2010. The acceleration reflected resilient exports as well as a strong recovery in domestic demand. Private consumption improved from a 1.1% expansion in Q3 to a 2.6% rise in Q4, while fixed investment rebounded from a 10.3% contraction to an 11.9% rise. Meanwhile, exports of goods and services remained buoyant and added 36.5% year-on-year (Q3: +24.0% yoy), while imports expanded 30.0% (Q3: +29.0% yoy). At the sector level the fourth quarter expansion was mostly driven by a surge in the industrial sector (Q3: +23.4% yoy; Q4: +30.4% yoy), while services improved somewhat. Agriculture, on the other hand, contracted over the same quarter the year before. A quarter-on-quarter analysis corroborates the acceleration implied by annual figures, as the economy expanded a seasonally and calendar-day adjusted 2.3% over the previous quarter, which was well above the 1.1% increase recorded in the third quarter. More recent economic information points to a continuation of the positive growth momentum seen in the industrial sector. In January, industrial output skyrocketed 4.2% over the previous month after seasonal and calendar-day adjustments, following on growth of 3.2% tallied in December. As a result, industrial activity expanded 28.8% over January 2010.