Statistics Estonia finds that Estonia’s GDP in the first quarter was 0.3% smaller than in the first quarter of last year. It was also smaller than GDP in the fourth quarter of 2024 by the same amount.

The new estimate from Statistics Estonia is notably different to the flash estimate issued earlier. The estimate was adjusted in a negative direction because of the volatility in car sales, but this should not have been a surprise when the flash estimate was compiled, since the data on those sales had already been published some time earlier. In any case, Estonia does not produce large quantities of cars, and so additional car sales should affect imports above all and have only quite a small impact on GDP.

Although the economy as a whole was down in the first quarter, some branches of it grew quite quickly. The set of sectors driving the growth in the economy is quite similar to that seen in other years of growth, with information and communication taking the lead, accompanied by high value-added services. Value added in information and communication was up by 13% over the year, while that in healthcare was up around 9% and in professional, scientific and technical activities it was up by 5%.

Manufacturing also stands out for the large differences in growth rates. Manufacturing exports to countries in the euro area have continued to increase, but those to non-euro area countries were smaller in the first quarter than in the fourth quarter of last year (see Figure). The expectations of manufacturing for the months ahead are no longer improving as they were at the end of last year. This may be partly because of the uncertainty around the restrictions to global trade that are expected. Companies estimate however that their stocks of finished products are generally too small, which creates space for output to increase moving forwards.

A positive sign for GDP on the demand side was the growth in exports, as exports of goods and services were around 5% larger at constant prices than a year earlier. Investment meanwhile was down a little because of declines in the two asset classes of dwellings and transport vehicles. The introduction of the car tax probably contributed to the decline for vehicles. Investment in various machinery and equipment increased though, probably partly because of investment in defence. Corporate investment was at broadly the same level as in the first quarter of last year, while investment by households was down and investment by the general government increased.

The largest part of the contraction in the economy came from the energy sector, which contributed 0.7 percentage point of it. Value added in the sector was 22% smaller than a year earlier. Electricity production was 11% more than a year earlier, but production of heat was down by 9%.

Agriculture and forestry, construction, and transportation and storage also all had a major negative impact on growth in the economy. All of those sectors saw quite a large rise in the price of value added. The monetary value of value added in those sectors fell by substantially less, and in some cases it increased.

For further information:
Evelin Jürisson
Communications Specialist
Eesti Pank
6680 965
Press enquiries: [email protected]