Estonian economy grew by 5.4 percent in the first quarter
In the first quarter of 2021, the gross domestic product (GDP) grew by 5.4 percent year on year. The GDP at current prices was €6.9 billion, data from Statistics Estonia shows.
National accounts data show how the Estonian economy is doing. The growth or decline of the economy is mainly measured by GDP and gross national income. The higher these indicators, the better Estonia and the people living here are doing.
Robert Müürsepp, lead analyst at Statistics Estonia, said that almost half of the economic growth was due to the impact of taxes, primarily the good receipts of value added tax (VAT) and excise duties.
"It is not, however, that the tax receipts are extraordinarily high, instead the reference base of the first quarter of last year was unusually low. Now we are back at the level of 2019," Müürsepp said.
The economic activities that contributed the most to economic growth were trade, information and communication, and financial and insurance activities. The positive impact of trade was, as in the case of taxes, due to its decline during the same period a year ago. The economy was also boosted by healthcare, in connection with coronavirus-related expenditures, and the energy sector, which benefited from the cold winter.
Of the larger economic activities, manufacturing again had a negative impact on economic growth along with the construction sector, which felt the impact of the pandemic with a delay. Due to restrictions on activities, accommodation and food service activities also remained in decline.
Private consumption has now been declining for over a year, shrinking by 3.3 percent in the first quarter. Aside from travel-related expenditures, other consumption showed modest growth. Similarly to previous periods, expenditures rose on communication, home furnishings and supplies, which are connected with the stay-at-home life style. Expenditures on eating out, leisure, transport, clothing and footwear continued to decrease. Expenditures on healthcare increased, driving also growth in general government consumption.
Investments were characterised by broad-based growth. There were increases in both households' investments in dwellings (by 13 percent) and enterprises' investments in transportation equipment (by 71 percent), buildings and infrastructure (by 7 percent) and machinery and equipment (by 5 percent).
Foreign trade that started growing at the end of last year continued in the same direction. Exports of goods increased by 5 percent and imports by 12 percent. The trade growth was supported by the imports and exports of wood products, electronics and motor vehicles. Among services, computer services gave the biggest positive contribution. Foreign trade in travel services continued to decline, while transport services are gradually recovering.
Compared to the fourth quarter of 2020, the seasonally adjusted GDP grew by 4.8 percent, and compared to the first quarter of 2020, by 5.0 percent.
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Editor: Helen Wright