Flash estimate: Estonia's economy contracts by 0.7% in third quarter
The decline in the gross domestic product (GDP) slowed down in the third quarter of 2024 to 0.7 percent on year, Statistics Estonia's preliminary data shows.
Robert Müürsepp, team lead of national accounts at Statistics Estonia, said that, compared with the previous quarter, the economy was stable.
"Compared with the second quarter of 2024, the seasonally and working-day adjusted GDP was up by 0.1 percent," noted Müürsepp.
According to Eurostat, the EU economy showed slightly faster growth in the third quarter, as the increase in GDP was 0.9 percent year on year.
More detailed data for the third quarter will be published on November 29.
Economist: Compared to the previous forecast, the result is weaker
Commenting on the flash estimate, Luminor's Chief Economist Lenno Uusküla said Estonia's GDP has been stable for two quarters.
"This reflects the ongoing weakness in Estonia's economy and was an expected outcome, given the already known third-quarter data. However, the result is slightly weaker compared to the previous forecast," he said.
"Luminor's forecast for the current year still projects a 1 percent economic contraction compared to 2023, and Estonia's economy remains on this trajectory," Uusküla added.
Private consumption continued to be weak in the third quarter: "Although purchasing power has slightly recovered over the year, little of this has translated into retail spending. This cautious behavior is understandable, given the ongoing uncertainty about the future."
The economist said, in anticipation of next year's car tax, it seems that more cars are being bought from their savings, which reduces other consumption options even more.
"Industrial production and exports are still struggling to gain momentum. Key sectors for Estonia remain in a slump, and although some new orders are coming in, there's no sign yet of a return to previous levels," said Uusküla.
"For most, it is not a crisis but rather a prolonged downturn where taxes and bills are being paid, but business is not seeing substantial growth. Consequently, investments remain low as well."
This article was updated to add comments from Lenno Uusküla.
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Editor: Helen Wright
