Robert Müürsepp, team lead of national accounts at Statistics Estonia, pointed out that in contrast to the previous quarters, in Q2, Estonia's economy showed several signs of improvement. "Of the major activities, only trade and construction had a strong negative impact on the economy during this period. The contribution of manufacturing remained unchanged in the second quarters of last and this year and was close to zero," Müürsepp said.

In his view, as far as positive contributors were concerned, it was mainly real estate activities that stood out.

Value added declined at the slowest rate over the last year and a half, falling by 1.7 percent in the second quarter (Value added is the total output of enterprises after taking away the value of inputs used for production). The slowdown was mainly due to a slight improvement in the performance of the non-financial corporations sector where value added fell by 2.2 percent. The value added of the financial sector decreased by 3.4 percent.

Similar to the previous two quarters, the Estonian economy again benefitted from the continuing rises in tax revenue. There were increased receipts from both value added tax and several excise duties in Q2.

Private consumption, however, continued at the same pace as in the first quarter, declining by 1.3 percent. The biggest drop in household expenditure was seen for clothing and footwear. Expenditure on transport and miscellaneous goods, as well as services also decreased significantly in Q2. Spending on financial and insurance services, food and accommodation and housing rose slightly.

Government consumption increased by 1.1 percent in Q2. According to Statistics Estnia, wage growth in the government sector has slowed down compared with the previous year, but is still the main driver of growth in this sector's value added, led by healthcare and education.

Investments were up by 7.9 percent in the second quarter. The main positive contribution came from non-financial corporations' investments in other buildings and structures, which increased by 64.9 percent. Households' investments in dwellings were down by 19.2 percent, and again had the biggest negative impact.

The second quarter also saw an improvement in Estonia's foreign trade. Both exports and imports fell once again, but this time only by 1.6 percent and 0.3 percent, respectively. Viewed separately, trade in goods declined by an additional few percent more in each direction. Exports of services, however, showed a modest upturn and imports of services continued to grow, as they did in the first quarter. Net exports remained positive for the third quarter in a row.

The seasonally and working-day adjusted GDP remained unchanged from the first quarter of 2024 and was 1.3 percent lower than in the second quarter of 2023.

More information is available here, here and here.

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