Statistics: Estonia's GDP falls 2.9 percent on year to Q2 2023

Energy and construction exerted a significant negative impact on Estonia's GDP for Q2 2023.
Energy and construction exerted a significant negative impact on Estonia's GDP for Q2 2023. Source: ERR

Gross domestic product (GDP) in Estonia fell by 2.9 percent on year in the second quarter of 2023 (Q2 2023) state agency Statistics Estonia says.

GDP at current prices amounted to €9.4 billion, the agency says, and rose by 5.1 percent at current prices.

Commenting on the results, Robert Müürsepp, team lead of national accounts at Statistics Estonia, said: "Despite a considerable slowdown in inflation in the second quarter, the overall economic situation has not improved substantially."

"To date, the Estonian economy has been in significant decline for three consecutive quarters. There was a fall in value added in most economic activities as well as in tax revenue adjusted for price changes. However, the recession in Q2 2023 was slightly slower than had been the case in previous quarters," Müürsepp added.

Contribution to GDP. Source: Statistics Estonia

Q2 2023 GDP data for Estonia quick facts (Source: Statistics Estonia)

  • Thanks to slower price growth, trade returned to pre-pandemic levels.
  • By activity, the largest positive contribution came from trade.
  • Real estate activities also made a noticeable positive contribution, though contributions of the remaining positive performers were modest.
  • Non-profit sector, which had been in decline since the end of 2021, grew by 1.1 percent.
  • Transportation and storage exerted biggest drag on the economy, while the energy sector and construction made significant negative contributions.
  • Professional, scientific and technical activities, information and communication, and financial activities also exerted their effects on the down turn.
  • Growth has halted in accommodation and food service activities, after strong growth immediately after the end of the pandemic.
  • Value added by non-financial corporations fell by 4 percent.
  • Value added of general government grew by 4.5 percent, however.
  • Investments also had a weaker quarter, falling to the pandemic-time levels (down 18.7 percent)," with non-financial corporations being the main contributors to the fall, particularly in investments mainly in other buildings and structures (-53.8 percent), machinery and equipment (-34.6 percent), and transport equipment (-39.2 percent).
  • The largest positive contribution came from households, where investments in dwellings rose by 14.7 percent.
  • Exports continued at the pace of the previous quarter, falling by 6 percent.
  • However, net exports remained positive for the second quarter in a row, despite the generally poor economic environment.
  • Exports of goods declined primarily as the result o lower sales in electricity supply and the manufacture of wooden items.
  • The fall in imports deepened to 9.1 percent, though there was a rise e in exports of services, led by transport, advertising, and computer services.
  • The same groups of goods as affected exports also contributed to the fall in imports of goods.
  • The drop in imports of services was mainly driven by transport services.
  • Government consumption grew for the first time in a long period, increasing by 1.8 percent.
  • Private consumption has now fallen for four consecutive quarters, and fell at an accelerating pace, by 3.3 percent, in the second quarter. This decline was mainly driven by lower expenditures on other goods and services, recreation and culture, and furnishings.
  • Private consumer spending on transport, communication, restaurants and hotels, and education increased.
  • The seasonally and working-day adjusted GDP decreased by 0.2 percent between Q1 and Q2 2023, and by 3.0 percent on year.
GDP growth in Estonia on year. Source: Statistics Estonia

Statistics Estonia compiled the above data on behalf of the Ministry of Finance.

More detailed information is here and here.


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Editor: Andrew Whyte

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