GDP flash estimate: Economy contracted by 0.1% in Q4

Gross domestic product (GDP) fell by 0.1 percent on year in the last quarter of 2024, Statistics Estonia's preliminary data shows.
Robert Müürsepp, team lead of national accounts at the agency, said the preliminary estimate shows signs of improvement in the Estonian economy in the fourth quarter of last year.
"There was no more major recession, as the seasonally and working-day adjusted GDP remained unchanged from the third quarter of 2024. Compared with the fourth quarter of 2023, the economy contracted only slightly," he said in a statement.
The Estonian economy had been in recession since the end of 2022.

By the end of last year, Estonia had essentially emerged from economic decline, and the overall situation has improved, Economist Heido Vitsur told ERR on Thursday.
"The real question is what happens next. Since the fourth quarter of the year before last, the pace of decline has been steadily slowing, which has been a strong and positive trend. However, there are quite a few uncertainties ahead next year," he noted.
Vitsur highlighted two major economic uncertainties.
First, it remains unclear how tax increases will impact the economy.
Second, the potential impact of the new U.S. president, Donald Trump, particularly regarding his tariff policies and how they might affect the global economy — especially Europe.

"So there are big questions. But at least based on what happened last year, we can say that we have reached the bottom of the decline, and we could see improvement ahead—provided that neither we nor anyone else does anything that could disrupt economic recovery," the economist said.
He said the biggest driver of economic improvement is the decline in interest rates.
"When money becomes cheaper, everything becomes easier," the expert explained, adding that lower interest rates are already having a rapid effect on the real estate market.
Vitsur also stressed Estonia's economic recovery depends on improvements in partner economies and the removal of trade barriers: "If Europe also starts reducing bureaucracy, it could have a significant impact on our economic well-being."
Given the rapid impact of these various factors, Estonia does not have time to adjust gradually, Vitsur warned.
"We must react quickly, and it is precisely the speed of our response that can determine our success," he emphasized.
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Editor: Helen Wright, Mirjam Mäekivi, Margitta Otsmaa