Estonian GDP grew by 1.8% over the year in the second quarter, and by 0.3% over the quarter. The growth was mainly driven by goods exports, which increased by 4.2% over the year. The increased volume of exports was reflected in strong growth in various sectors, most notably manufacturing.

The main growth was in exports of goods and services to countries in the euro area, which took 9% more goods and services than a year earlier at constant prices not adjusted for inflation. Exports outside the European Union and to European Union countries that are not in the euro area fell at the same time. Sales from manufacturing followed a similar pattern.

Demand from local companies and households in Estonia made an unexpectedly small contribution to economic growth, particularly because corporate investment declined. Construction volumes and imports of capital goods increased at the same time though. It is difficult to measure investment accurately in real time, and the initial estimates of growth in investment in earlier periods have often been corrected upwards later. This means it is possible that the estimate of investment in the second quarter will be more positive than it is at present once new data have come in.

Spending by households on goods and services increased more slowly in the second quarter than in the first. Rising inflation driven by higher fuel prices had some impact on this. The calculation of price changes for GDP takes account of the quantities of goods and services consumed in the current period, but the consumer price index uses the average consumption amounts of the previous year. The price changes of the components of GDP may consequently differ from what the consumer price index indicates.

Weaker development than expected in some sectors that focus on the domestic market stands out in a comparative view across the sectors of the economy, and that may be due to higher inflation and particularly to higher fuel prices. Value added in retail was 3% down on the year at constant prices for example, while it increased by around 11% at current prices over the same time.

GDP grew more slowly in the second quarter than in the first, but estimates by businesses of the state of the economy have become more positive and suggest that the economy will grow further in the second half of the year. Eesti Pank will publish a new economic forecast on 22 September.

Additional information:
Hanna Jürgenson
Eesti Pank
Communications officer
Tel: 56920 930
Press enquiries: [email protected]