The economy contracted by 0.7% in Q3

Robert Müürsepp, team lead of national accounts at Statistics Estonia, noted that the economy, which has been falling for ten quarters in a row, is showing signs of improvement, but the biggest changes are still on the negative side. “Among the activities, construction had a strong negative impact on the economy, as did manufacturing. The biggest positive contributor after two years was again information and communication, where value added grew by 7.3%,” Müürsepp stated. 

Real estate activities and agriculture, forestry and fishing also made larger positive contributions to the economy. The impact of the remaining activities was modest, but almost half of them contributed positively. “These included major activities such as transportation and storage and trade. The last time there were so many positive contributors was exactly a year ago,” added Müürsepp.

Value added declined by 1.7% in the third quarter, slightly faster than in the previous quarter. Value added is the total output of enterprises after taking away the value of inputs used for production. The decline was due to the performance of non-financial corporations – value added in this sector fell by 2.5%. By contrast, the value added of general government grew by 2%.

The rise in tax revenue again made a positive contribution to the economy, with increased receipts from value added tax and customs duties.

Private consumption declined in most expenditure groups at the fastest pace in the last five quarters – 2.1%. The biggest drop was seen in expenditures on other goods and services, alcoholic beverages and tobacco and recreation and culture. Spending on clothing and footwear, furnishings and food decreased as well. However, expenditures on financial and insurance services showed strong growth. Spending on accommodation and food services also increased significantly.

Modest growth was observed in final consumption expenditure of the government sector as well as non-profit institutions. Growth in consumption in both sectors was below 2%.

Investments were down by 15.2% in the third quarter. The fall in investments in buildings and structures had the biggest impact, both in non-financial corporations (30.1%) and in the government sector (21.7%). In addition, there was a decrease in enterprises' investments in other machinery and equipment (11.5%) and households' investments in dwellings (16.7%).

“However, this drop in investments is not a sign of a worsening economic outlook, but the level of investment in the third quarter of last year was unusually high. This year's figure was close to the level of previous years,” explained Müürsepp.

Foreign trade also continued to show a modest improvement. Exports remained at the same level as in the third quarter of last year, while imports fell by 1.3%. As a result, net exports were positive for the fourth quarter in a row. In trade of goods, exports fell by 1.2% and imports rose by 1.8%. Exports of services continued at the pace of the previous quarter, increasing by 1.8%. Imports of services, however, decreased by 7.6%. 

The seasonally and working-day adjusted GDP remained unchanged compared with the second quarter of 2024 and was down by 0.6% from the third quarter of 2023.

National accounts data show how the Estonian economy is doing. The growth or decline of the economy is mainly measured by GDP and gross national income. The higher these indicators, the better Estonia and the people living here are doing.

Statistics Estonia performs the statistical activity “National accounts” for the Ministry of Finance in order to determine how the Estonian economy is doing.

More detailed data have been published in the statistical database. See also the national accounts section on our website.

When using Statistics Estonia’s data and graphs, please indicate the source.
 

For further information:

Heidi Kukk
Media Relations Manager
Marketing and Dissemination Department
Statistics Estonia
Tel +372 625 9181
press [at] stat.ee

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