Economic growth accelerates to 5.7 percent in second quarter
According to Statistics Estonia, the gross domestic product (GDP) of Estonia increased by 5.7 percent in the second quarter of 2017 compared to the same period in 2016.
In the second quarter GDP at current prices reached €5.8 billion. The seasonally and working-day adjusted GDP grew by 1.3 percent compared to the first quarter this year, and by 5.2 percent compared to the second quarter of 2016.
The biggest contributor to GDP growth was construction, which was one of the fastest-growing economic activities for the second quarter in a row. Other main contributors to GDP growth were the professional, scientific, and technical activities, transportation and storage, information and communication, and energy sectors.
While the energy sector grew for the first time in several quarters, the others have been important contributors already over a longer period of time. The steady growth in wholesale and retail, one of the largest economic activities, also supported growth. The fastest growth in value added took place in mining and quarrying.
A sector that negatively affected growth was agriculture, forestry and fishing, due to a fall in its value added caused by the accelerated price increase of agricultural production. Although the value added in all economic activities grew at current prices, public administration and defense as well as compulsory social security, accommodation and food service, and other service activities had a negative impact in real terms.
Manufacturing, the largest economic activity, had a positive impact on GDP. The main reason for this is the growth of value added in the manufacturing of metal products, food and beverages, and machinery and equipment not elsewhere classified. Manufacturing of mineral products and electronic equipment had the biggest negative impact on the growth of manufacturing overall.
In the second quarter exports of goods and services grew by 1.3 percent in real terms. Similar to exports, imports of goods and services grew more slowly than previously as well, namely by 2.2 percent. The main positive contributors to exports were other machinery and equipment as well as wood and wooden products. Imports were driven mainly by various transportation equipment. Computers and electronic and optical products had the most noticeable negative impact on imports.
Net exports in the second quarter reached approximately €200 million, which is 3.4 percent of GDP.
As the number of persons employed and the number of hours worked did not change significantly in the second quarter, productivity per employed person and per hour worked grew at a similar rate as GDP. The increase in labour costs accelerated to 9 percent. Although the growth of the nominal unit labor cost was slower than that of GDP, it still reached 3.7 percent.
Domestic demand grew by 3.1 percent as all of its components strengthened. The growth in domestic demand was driven by gross fixed capital formation, which grew by 18.2 percent in real terms in the second quarter. The main contributors to growth were investments in transportation equipment as well as buildings and infrastructure by non-financial enterprises and the government sector.
The final consumption expenditures of households grew by 2 percent. A significant impact here came from increased spending on transportation, food and non-alcoholic beverages, and accommodation. The biggest negative impact came from lower spending on alcohol and tobacco.
Editor: Dario Cavegn
Source: Statistics Estonia