Economic Growth Climbs to 1.3% in Q2 ({{commentsTotal}})

Source: Photo: Postimees/Scanpix

The nation's year-on-year GDP growth hit 1.3 percent in the second quarter, according to initial estimates from Statistics Estonia.

Though a marginal improvement from the 1.1 percent seen in the prior quarter, the result is hardly close to the 3 percent that most institutions were forecasting for 2013 growth at the beginning of this year.

In its release today, Statistics Estonia said that the 0.1 percent growth between the first and second quarters of this year came thanks to an increase in computers, electronics and optical products manufacturing.

Exports were up 8 percent compared with the same quarter of last year, mainly a result of increased output of chemicals and chemical products as well as electronics.

Imports, meanwhile, grew 10 percent over the same period thanks to growth in imports of coke and refined petroleum; and computers, electronic and optical products.

In May, analysts were disappointed by the worse-than-expected result for the first quarter, as well as by what turned out to be a 1 percent decline in GDP from the previous quarter, the first drop since the country began pulling out of its recession in 2009.

The initial result prompted the OECD to slash its forecast of this year's GDP growth from 3.7 percent to 1.5 percent.

Two months ago, the Bank of Estonia downgraded its 2013 economic growth projection to 2 percent, down from the 3 percent forecast released last December. At the time it said that slowdown was due to lagging domestic consumption, primarily with regard to fixed-asset investments. It said, however, that the slowdown is due to temporary factors and that growth is expected to pick up to 4 percent in 2014 and 2015 thanks to higher domestic and foreign demand.