Analytics, Economics, Estonia, GDP, Markets and Companies

The seasonally and working-day adjusted GDP increased by 0.5% compared to the 1st quarter.

In the 2nd quarter, the fast growth of the value added in construction, trade, information and communication activities contributed the most to the economic growth. The growth in construction was supported mainly by the repair and reconstruction work of buildings and construction of structures. The fast growth of information technology and telecommunication services had the biggest impact on the growth of the value added of information and communication. Retail trade contributed the most to the GDP growth in trade activities, whereas the value added of wholesale activities decreased.

The decrease in the value added of manufacturing, transport and storage and real estate activities inhibited the GDP growth the most. The decrease in the production of computers, electronic and optical products had the biggest negative impact on manufacturing. The decrease in the value added of land transport and support activities for transportation had the biggest negative impact on transport and storage. Although the value added of real estate activities increased at current prices, the continuous fast increase in prices in this economic activity resulted in the decrease in the value added at constant prices.

Export growth of goods and services decelerated to 4% and the growth of import decelerated to 6% in the 2nd quarter. Machinery and equipment and metals contributed the most to the export of goods, while metal products, food products and motor vehicles contributed the most to the growth of import of goods. Despite the growth of import in excess of the growth of export, the foreign trade balance of Estonia improved. In the 2nd quarter, the share of net exports in the GDP was 2.7% (still in the 1st quarter import exceeded export). Due to the weak foreign demand, the contribution of export to the economic growth has decreased, that is the reason why economic activities targeted more to the domestic market contributed substantially to the GDP growth in the 2nd quarter.

In the 2nd quarter the amount of hours worked increased faster than the GDP at constant prices. This resulted in the decrease in labour productivity per hours worked of the total economy by 0.5% compared to the same quarter of the previous year. At the same time labour costs for the GDP production have increased. Unit labour costs have increased by 6% compared to the same quarter of the previous year, which indicates that the compensations per employee have grown faster than the productivity. The growth of the unit labour costs was the fastest of the previous three and a half years.

Growth of the value added of economic activities, 2nd quarter 2012

The growth of the domestic demand accelerated to 6% primarily on account of the growth of gross fixed capital formation. Gross fixed capital formation grew by 26% mainly due to both business and government sector investments in buildings and structures, as well as to accelerated growth in transport equipment in business sector. Household final consumption expenditures increased by 2%. The increase in the purchase of vehicles and consumption of audio-visual and data processing equipment, telephone services and alcoholic beverages had the biggest contribution to the growth. At the same time, the consumption of electricity and gas at constant prices decreased. Despite the increase in domestic demand already for nine quarters in succession, it was continually less than the GDP (96% of the GDP).

Since the rate of the growth of disposable income was slightly smaller than the growth of final consumption expenditures, net saving of total economy decreased. Gross capital formation exceeded the saving – that is the reason why Estonia was net borrower from the rest of the world for the second quarter in succession.

Statistics Estonia revised the national accounts data for 2008–2011 based on the supply and use tables and annual reports of enterprises. The GDP for the 1st quarter of 2012 was also revised. As a result of the revisions, the annual GDP at current prices changed -0.6 to +0.1%. The annual GDP real growth during the referred period changed -0.5 to +1.1 percentage points and quarterly GDP real growth changed in the same period between -1.4 to +1.6 percentage points.

See a more detailed overview about the revision in  2012: http://www.stat.ee/dokumendid/64759.