Estonia Back in Recession as Q2 GDP Revised Downward to 1% ({{commentsTotal}})

Source: Photo: Postimees/Scanpix

An already gloomy picture of Estonia's economic performance became even darker today as Statistics Estonia's announced a 0.2 percent drop in GDP between the first and second quarters of 2013, a result that technically puts the country back in recession.

The revised second quarter GDP figure of 4.65 billion euros pegs the year-on-year economic growth at 1 percent, down from the 1.3 percent shown by flash estimates a month ago.

In today's release, Statistics Estonia said that GDP was dampened by decreases in value added in  transportation and storage, specifically warehousing and transportation support activities. Declines in the value added of professional, scientific and technical activities, as well as in agriculture and forestry, also contributed to the slowdown.

The losses were offset somewhat by growth in wholesale activities and residential property rental.

Domestic demand for the quarter increased 3.2 percent.

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.

Economists generally define a recession as two consecutive quarters of GDP decline.