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Country Report Estonia Product Image

Country Report Estonia

  • ID: 2114012
  • December 2014
  • Region: Estonia
  • 67 Pages
  • The Economist Intelligence Unit

According to a second estimate from Statistics Estonia, real GDP increased by 2.2% year on year in the third quarter of 2014. Compared with the second quarter, real GDP increased by 0.4% (seasonally and working-day adjusted).

Economic growth in Estonia gathered some momentum in July-September 2014, building on a year-on-year expansion in real GDP of 2% in April-June. Household consumption continued to drive the recovery, rising by 5.3% year on year, against a backdrop of falling unemployment and strong real wage growth. Government spending also increased, by 2.4% year on year-its strongest pace of growth since the third quarter of 2013. But the year-on-year increase in total domestic demand slowed during the period, to 2.7%, from 4.3% in the second quarter, weighed down by a 9.7% contraction in gross fixed capital formation. This was consistent with a sharp deterioration in the European Commission's measure of industrial sentiment in Estonia in September. The indicator recovered slightly in October-November, but remained subdued relative to its pre-crisis levels, suggesting that investment spending will remain low.

More encouragingly, exports of goods and services accelerated to 4.9% year-on-year growth in July-September, after subdued 0.3% growth in April-June marked the end of nine months of annual contraction in export sales. Although strong household and public domestic demand sustained a 2.2% year-on-year increase in imports of goods and services, it was not enough to offset the increase in export earnings, which resulted in a positive contribution to growth from the net trade balance.

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Country Report Estonia

Growth picks up in Q3
Event
Analysis
Impact on the forecast

Note: Product cover images may vary from those shown
Note: Product cover images may vary from those shown

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