Third quarter economic growth below analysts' expectations

Central Tallinn skyline.
Central Tallinn skyline. Source: Siim Lõvi /ERR

The economic growth of 8.6 percent registered in Estonia for the third quarter of 2021 fell short of the expectations of analysts, who estimated at the end of last week that the growth in Estonia's gross domestic product (GDP) would come close to 10 percent.

Estonia's quarterly GDP at current prices totaled €7.9 billion in the third quarter, and the economic growth was driven by construction, information and communication, real estate, and transportation and storage activities, Statistics Estonia said on Tuesday.

Mihkel Nestor, economic analyst at SEB, said in his comments to BNS last week that the bank has made its calculations estimating approximately 10-percent growth. Nestor added the reservation that Estonia's quarterly GDP growth can significantly be affected by a few individual transactions, however.

Swedbank chief economist Tõnu Mertsina told BNS that according to his calculations, economic growth in the third quarter this year will be close to 9 percent.

"As the impact of last year's low reference base diminished in the third quarter, most growth figures in production and consumption were weaker than in the second quarter," the economist said, adding that economic activity and the growth thereof remained strong however.

Kristo Aab, economic analyst at LHV, told BNS that GDP growth should prove faster than 10 percent in the third quarter.

"Strong economic growth definitely continued in the third quarter. Construction volumes grew 15 percent, industrial production volume 8 percent and retail sales revenues 12 percent. These three sectors account for slightly less than one-third of the added value created in the Estonian economy," the analyst said.

Luminor chief economist Tõnu Palm told BNS that the bank's prognosis from September predicts continuous very fast growth in the third quarter with 10.6 percent growth projected in yearly comparison.

"Estonia's economy remains among the fastest growing economies in the euro area and improvement in the labor market was significant in the third quarter. The unemployment rate among women will be the first to reach pre-crisis levels," the economist said.


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Editor: Helen Wright

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