According to Statistics Estonia, the Estonian economy contracted by 1.4 percent year-on-year in the first quarter of 2014, not the 1.9 percent initially estimated.
Energy was one of the areas that slowed down GDP growth the most, with consumers using less energy, and energy producers importing electricity to replace their own production as a cheaper alternative.
Real estate and transport were other areas that saw a year-on-year decrease. The main reason for the deceleration in real estate was an accelerated rise in prices.
The growth of manufacturing, which is the main contributor to economic growth in Estonia, slowed down mainly due to a decrease in the manufacture of electronic and chemical products. However, the economy was buoyed by the timber industry.
In the first quarter of 2014, the GDP was driven the most by a rise in the value added in professional, scientific and technical activities, mining and quarrying, and public administration and defense activities.
The export of goods decreased for the third quarter in a row, being influenced the most by a deceleration in the export of electronic and chemical products. At the same time, exports of services grew 8.5 percent.
Despite weak external demand, Estonia’s economy was substantially supported by growing domestic demand. Domestic demand increased at real prices by 2.1 percent, mainly due to the household final consumption expenditures.
Q1 GDP was clocked at 4.4 billion euros, while the seasonally and working-day adjusted GDP decreased by 0.7 percent.
The drop in GDP follows a 0.3 percent gain in the 2013 year-on-year fourth quarter statistic. The economy grew 1.3 percent in the same first-quarter statistic last year.
The previous time that the GDP fell was in the 1st quarter of 2010.