Statistics: Estonia's GDP down 3.2 percent at current prices in Q1 2023

Money. Source: Siim Lõvi /ERR

According to data provided by Statistics Estonia, Estonia's gross domestic product (GDP) decreased by 3.2 percent at constant prices in the first quarter (Q1) of 2023 when compared with Q1 2022. Estonia's gross domestic product (GDP) at current prices amounted to €8.7 billion.

Robert Müürsepp, team lead of national accounts at Statistics Estonia, said that Estonia's GDP increased by 9.3 percent at current prices in Q1. "Although inflation is slowing, the impact of price rises on economic indicators remains strong. Both tax revenue and the decline in value added in all sectors, other than general government, contributed negatively to the GDP," Müürsepp said. At constant prices, tax revenue continued on the downward trajectory from the previous quarter.

For the second quarter in a row, the agricultural sector was the main positive contributor to the Estonian economy. A significant contribution was also made by professional, scientific and technical activities. Of the larger activities, the construction sector made a positive contribution to the economy, while the remaining sectors either contributed modestly or had a dampening effect on economic growth. One of the largest negative contributors was the information and communications sector. "This form of economic activity, which used to be one of the key drivers of the Estonian economy, has been performing the opposite role for two quarters in a row," said Müürsepp. The energy sector had an equally strong impact in Q1, however economic growth was held back significantly by transportation and storage, financial and insurance activities, real estate activities, and manufacturing.

Private consumption in Estonia fell for the third quarter in a row, this time by 1.9 percent. This represented a continuation of previous trends, with the biggest decrease recorded in housing-related expenditures and expenditure related to going out and entertainment increasing the most. Spending on restaurant and hotel services, as well as on clothing and footwear all went up in Q1. The running costs for water, electricity and other utilities also increased.

Contribution of economic activities to GDP growth. Source: Statistics Estonia

In contrast to other sectors of the economy, government consumption remained at the same level in Q1 202 as it had done in the same quarter last year.

Investments fell slightly, by 3.4 percent. The biggest increase was recorded in households' investments in dwellings, which was up by 63.7 percent. General government investments in other buildings and structures grew by 36.9 percent.

Meanwhile, the biggest falls were seen in enterprises' investments in transport equipment ( down 91.7 percent) and in machinery and equipment ( down 49.8 percent).

Foreign trade continued to fall after previously hitting record levels. Exports declined at a pace similar to the previous quarter (6.9 percent), while previous growth in imports also came to an end, with a decrease of 7.3 percent. The fall was led on both fronts by trade in goods, with energy and wood products having the biggest impact.

GDP growth. Source: Statistics Estonia

"Forestry, electronic products, and electrical equipment stood out as being positive," Müürsepp said. Exports of services grew slightly, by 2.5 percent, in the first quarter. The main contributors in this area were maritime transport, computer services, and advertising services. However, service imports fell by 1.9 percent, mainly due to a reduction in freight rail transport and advertising services.

Estonia's seasonally and working-day adjusted GDP decreased by 0.6 percent in Q1 2023, when compared with the fourth quarter of 2022. It was also down 3.7 percent on year from Q1 2022.


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Editor: Michael Cole

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