In the 3rd quarter the economic slowdown continued

The seasonally and working-day adjusted GDP grew by 0.6% compared to the previous quarter.

In the 3rd quarter, the GDP at current prices was 4.7 billion euros.

For the second consecutive quarter, trade contributed the most to economic growth with the help of accelerated retail and wholesale trade. In addition, according to the second estimates, another major contributor to GDP growth was the rise in the value added of information and communication and manufacturing activities. The increased manufacture of metal products contributed the most to the increase in manufacturing. In the 3rd quarter of 2013, more than half of the economic activities contributed to GDP growth.

In 2012, the value added of construction was the main driver of economic growth, but similarly to the two first quarters of 2013, it showed a declining trend in the 3rd quarter. Construction was one of the main economic activities that decelerated economic growth in the 3rd quarter, due to the decrease in the construction of buildings, although there was a rise in civil engineering.  In addition, GDP was negatively affected by transportation and storage (specifically warehousing and support activities for transportation) and the decrease in value added in real estate activities.

The contribution of net taxes on products to Estonian economy was negative. Their 1.4% decrease was mainly caused by a decline in the receipts of value added tax; excise tax receipts, however, increased. Compared to the 3rd quarter of 2012, payments of subsidies increased as well.

In the 3rd quarter of 2013, compared to the same quarter of 2012, the real export of goods and services decreased by 1% (export of goods decreased 2%), while real import of goods and services grew 1%. The last time that the export of goods and services decreased compared to the same period of the previous year was in the 4th quarter of 2009. In Estonia export of goods and services is continually bigger than imports. The share of net exports in the GDP was positive for the second consecutive quarter. In the 3rd quarter this share was 1.3%.

Although the economic growth has slowed from the beginning of the year, the real growth of domestic demand has accelerated. In the 3rd quarter, its growth rate was 5%, primarily due to the increase in gross fixed capital formation (11% growth in real terms). The growth was mainly driven by investments in transport equipment, machinery and equipment, and buildings and facilities by the business sector.

In addition, the increase in domestic demand was influenced by the 4% growth of household final consumption expenditures. This increase was primarily the result of increased expenditure on recreation and culture, food and beverages and housing. In the 3rd quarter, domestic demand was bigger than GDP.

The second estimates of GDP are calculated according to the supplementary quarterly data and by the production, expenditure and income approaches. Therefore, they may differ from the flash estimate. The flash estimate of GDP growth is calculated on the basis of monthly data and forecasts using only the production approach.

Growth of the value added of economic activities, 3rd quarter 2013