Economic growth slowed down in 2013

2013

In 2013, the GDP at current prices was 18.4 billion euros.

2013 is characterised by a deceleration of the Estonian economy. While in the 1st quarter, the GDP grew 1.3% compared to 2012, then in the 4th quarter, there was a growth of 0.3%. In total, the Estonian GDP rose 0.8% in 2013, which was the smallest increase in the last four years.

The growth of the trade activity contributed significantly to the increase of the GDP. While in the first three quarters, it occurred due to an increase in the wholesale activity, then in the 4th quarter the growth of the value added in retail trade had the biggest impact. In addition, in 2013, manufacturing and information and communication activities contributed the most to the GDP growth. Manufacturing increased mainly due to a growth in the exports of production, there was also an increase in the domestic sales of manufacturing production.

In the four quarters of 2013, a decrease in the value added in transportation and storage slowed the Estonian economy down the most. In the 1st quarter, this was caused by a decline in the value added in land transportation, whereas in the other three quarters, it was caused by a decline in the value added in warehousing and the support activities for transportation. In addition, a decline in construction and professional, scientific and technical activities had a negative effect on the GDP as well. The volumes of dwelling construction on the domestic construction market increased 2%, but the decline in the value added of construction was mainly caused by a decrease in building construction.

Domestic demand grew 1.5%, mainly because of an increase in households’ final consumption expenditures. The increase of the final consumption expenditures was mostly caused by a growth in the expenditures of recreation, culture, food and non-alcoholic beverages. The real gross fixed capital formation grew 1%. Although general government investments decreased throughout 2013, investments by non-financial corporations rose 9% in 2013. Domestic demand grew faster than the GDP, the total final consumption expenditures, gross fixed capital formation and change of inventories were smaller than the GDP by output method. The previous time that the GDP by output method exceeded domestic demand was in 2008.

The real export of goods and services grew 1.8% compared to 2012 in spite of the decrease of this indicator in the last two quarters. The import of goods and services decreased in the last quarter, but the total annual growth amounted to 2.6% in 2013. Estonian foreign trade was influenced positively the most by the export and import of computers, electronic and optical products.

Net export, i.e. the difference between export and import, was positive in 2013. The share of net export in the GDP was 0.8%, which is higher than in 2012.

4th quarter 2013

The GDP at current prices was 4.8 billion euros in the 4th quarter. Compared to the 4th quarter of 2012, the change in the GDP was 0.3%. Compared to the 3rd quarter of 2013, the seasonally and working-day adjusted GDP grew by 0.2%.

In the last quarter of 2013, the GDP was driven the most by a rise in the value added in trade, information and communication and manufacturing. The increase of the value added in trade was supported by the growth of retail sales of goods by retail trade enterprises. The growth of manufacturing remained stable in the 4th quarter (compared with the 2nd and 3rd quarters of 2013), and the contributions of the value added in this activity to economic growth have not decreased.

Similarly to the previous three quarters of 2013, transportation slowed the Estonian economy down the most in the 4th quarter as well. In addition, a decline in professional, scientific and technical activities and construction had a considerable negative effect on the GDP in the 4th quarter. The decline in construction was mainly caused by a drop the construction of buildings. Volumes in dwelling construction decreased 4.2% on the domestic construction market in the 4th quarter.

Domestic demand declined in real prices 3.0%. Compared to the same period of the previous year, the previous time the change of this estimate was negative was in the 1st quarter of 2010. The decline was mainly caused by a decrease in inventories and in gross fixed capital formation. The 1.2% decrease of the gross fixed capital formation was mostly influenced by a decrease in general government investments. Investments in machinery and equipment by the sector of non-financial corporations decreased, but this was counterbalanced by an increase in the investments in transportation equipment by non-financial corporations. Therefore, gross fixed capital formation by non-financial corporations stayed on the same level compared to the same quarter of the previous year. Household final consumption expenditures increased in real prices 3.0%, mostly due to a rise in the expenditures on recreation, culture, food and non-alcoholic beverages.

The real export of goods, compared to the same quarter of the previous year, decreased for the second quarter in a row. In the 4th quarter of 2013, export of goods fell by 0.9% and import of goods by 2.7%. Trade was influenced the most by an increase in the export and import of electronic equipment and by a decrease in the export and import of other machinery and equipment. The export of goods was also significantly affected by an increase in the export of wood and wood products, whereas the import of goods was affected by an increase in other manufacturing. The share of net export in the GDP was 1.0%, remaining at a stable level in the last three quarters.

On 21 May 2013 European Parliament and the Council adopted Regulation (EU) No 549/2013 on the European system of national and regional accounts in the European Union (ESA 2010). From 1 September 2014, all Member States will change the current methodology, ESA 95, to a new methodology, ESA 2010. Statistics Estonia will publish revised estimates for the 1st quarter 2000 – 2nd quarter 2014 on 8 September 2014. Revised estimates for the 1st quarter 1995 – 4th quarter 1999 will be published by Statistics Estonia in 2015.