Robert Müürsepp, national accounts team lead at Statistics Estonia, said that there was a broad-based recession in Estonia throughout last year.

"There were positive contributions from just a few economic activities, and the major sectors mostly experienced decline. Last year, the economy was boosted most by trade and real estate activities, while information and communication had the biggest negative impact. But the contribution of the latter also turned positive in the second half of the year," explained Müürsepp.

In the fourth quarter, the biggest positive contributors to Estonia's GDP were agriculture, forestry and fishing, and trade. There was a continued decline in the energy sector, as well as in manufacturing, professional, scientific and technical activities, and transportation and storage. The construction sector was also a negative contributor, continuing a trend which has been seen for the last year and a half.

Müürsepp noted that Estonia has not suffered such a broad-based economic decline since the real estate bubble burst. "Even during the year of the coronavirus pandemic, there was a bigger number of positive contributors to GDP than in 2023. However, it should be mentioned that, last year, both gross domestic product and value added continued to show growth at current prices. The weak performance in real terms in the last two years has been caused by the rapid increase in prices, which has affected all economic activities," Müürsepp said.

Year ended with rise in tax revenue and private consumption

Inflation slowed down at the end of 2023, and this helped to reverse the trend of several GDP components, which started to rise after having followed steady downtrend for most of the year.

In the fourth quarter, the value added of the non-financial corporations sector fell by 5.9 percent, while the financial sector showed a 0.5 percent growth. In 2023 as a whole, value added in these sectors decreased, by 4.4 percent and 5.2 percent, respectively

The general government had its weakest performance in the first quarter, when its value added grew just by 1.3 percent. Growth was at 4.4 percent in the fourth quarter and 3.5 percent for 2023 as a whole. The biggest shift occurred in tax revenue. Net taxes on production were in clear decline for the first three quarters 0f 2023, but then grew by as much as 6.3 percent in the fourth quarter. As a result, the yearly decline was just 1.9 percent.

There was also an upturn in private consumption during Q4, as the decrease of previous quarters made way for a 0.5 percent increase. In 2023 as a whole, private consumption fell by 1.5 percent.

Last year, the biggest decrease occurred in household expenditure on other goods and services, furnishings, and recreation. The most significant rise occurred in expenditures on communication, housing, and restaurants and hotels. In Q4, expenditure on education and transport also grew significantly. In 2023, household expenditure on goods decreased by 3.1 percent, while expenditure on services remained more or less at the same level, growing by 0.3 percent on year.

Government consumption saw a downturn in the third quarter but recovered quickly and grew by 2 percent in Q4. The total increase in government consumption in 2023 was 0.9 percent.

 Difficult year for investments and foreign trade

2023 was a volatile year for investments but, in the fourth quarter, investments remained almost the same as in the corresponding quarter of 2022 (down 0.4 percent). There was a positive impact from government investments in other machinery and equipment and weapons systems (+47.6 percent) and in other buildings and structures (+15.5 percent). The biggest negative impact came from the investments of non-financial corporations in the same groups of assets (down by 13.8 percent and 6 percent, respectively). In 2023 as a whole, investments fell by 3.4 percent. The biggest boost came from investments in dwellings which rose by 14.1 percent. Investments in transport equipment fell by 41.1 percent and thus made the biggest negative contribution.

In foreign trade, the situation remained difficult in the fourth quarter – exports of goods and services fell by 9 percent and imports were down 6.6 percent. In trade in goods, the decrease was 13.5 percent in exports and 10.1 percent in imports. This was primarily affected by electricity, manufacture of wood, and chemical products.

Trade in services fared slightly better: exports were down by just 0.7 percent and imports up by 2.9 percent. Here, performance was hampered mainly by the decline in the transport sector, which was primarily due to rail transport services. At the end of 2022, foreign trade represented 86 percent of Estonia's GDP. This share was down to 78 percent by the end of 2023.

The seasonally and working-day adjusted GDP decreased by 0.7 percent when compared

More information is available is here and here.

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