Estonian economy contracts 6.9 percent on year to Q2 2020

Government debt stood at 2.3 percent of GDP on year to April 2020 (picture is illustrative). Source: Leonhard Foeger/Reuters/Scanpix

Gross Domestic Product (GDP) fell by 6.9 percent on year to the second quarter of 2020 (Q2 2020), according to state agency Statistics Estonia. GDP at current prices stood at €6.4 billion.

Robert Müürsepp, leading analyst at Statistics Estonia, says most economic activities experienced an economic downturn as a result of the emergency situation caused by coronavirus.

"Accommodation and food service activities, which were hit most severely by the emergency situation, fell by 58 percent, manufacturing by 19 percent, trade by 11 percent, transport by 8 percent, real estate activities by 13 percent and professional, scientific and technical activities by 10 percent." Müürsepp said, adding that only construction and IT and communications saw growth over the period, of 12 percent and 8 percent respectively.

Tax receipts also fell on year, though at a slower rate than the overall downturn, Statistics Estonia says.

Contribution of economic activities to GDP growth (in percentage points), Q2 2020 Source: Statistics Estonia

Exports fell by 19 percent and imports by 22 percent on year to Q2 2020, mainly due to an overall fall in freight and transport services and the contraction of travel services.

More goods and services have been exported than imported, resulting in a record net export surplus of 6.2 percent of GDP, Statistics Estonia says.

Seasonally adjusted GDP fell by 5.6 percent between the Q1 and Q2 2020; on year it fell by 6.5 percent, Statistics Estonia says.

Contribution of consumption to GDP growth (in percentage points), Q2 2020 Source: Statistics Estonia

GDP breakdown

  •  Household consumption fell 8.7 percent on year to Q2 2020, with nearly all sectors seeing a fall, though lifestyle-related expenditure on food and communication services saw growth.
  • Investments fell by 15.4 percent, with particularly high declines seen in investments by enterprises into buildings and structures (35.2 percent fall) and transport equipment (62.5 percent fall). THis decrease was softened to some extent by an increase in government sector investments into buildings and structures (7.7 percent growth) and households' investments into dwellings (3.1 percent).
  • Government sector consumption increased by 3.7 percent, mostly due to higher health care spending related to the coronavirus (7.9 percent increase).

More detailed data is here.

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Editor: Andrew Whyte

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