Inflation reduced GDP growth to just 0.6% in the second quarter
In the second quarter of 2022, the gross domestic product (GDP) grew by 0.6% year on year. The GDP at current prices was 9 billion euros.
Robert Müürsepp, leading analyst at Statistics Estonia, said that although the GDP at current prices increased by 17.8%, the real GDP remained almost at the same level as in the second quarter last year, due to continued high inflation. “After adjustment for inflation, there was no significant growth in tax revenue or value added,” noted Müürsepp.
The main driver of the Estonian economy is still information and communication. This activity had the biggest positive impact on economic growth. The other main contributors to GDP growth were professional, scientific and technical activities, and accommodation and food service activities. The latter, which is still recovering from the coronavirus crisis, made a strong contribution for the second consecutive quarter. Due to rising prices, the majority of economic activities had a negative impact on GDP growth, with the biggest negative contributions made by manufacturing, real estate activities, the agricultural sector, and wholesale and retail trade.
Private consumption also slowed down in the second quarter and increased by 4.8%. People’s consumption expenditures abroad are not yet back at the same level as before the pandemic, while their spending related to going out in Estonia exceeded the pre-pandemic levels. There was a rapid rise in people’s spending on clothing and footwear, restaurants and hotels, and recreation and culture. There was a slight decline in expenditures on education and health.
The decrease in investments (-23.3%) was a little slower than in previous quarters. The main reason for the decline was the decrease in enterprises’ investments in computer software and databases (-86.5%). Despite the difficult times in industry, enterprises increased their investments in buildings and structures (12.9%) and transport equipment (7.5%). General government investments fell by 11.0% in the second quarter.
Commodities related to energy played the biggest role in foreign trade in the second quarter. There was a 0.4% decrease in exports and a 5.6% increase in imports, strongly influenced by trade in electricity, coke and petroleum products, and crude oil and natural gas. Trade in services was primarily influenced by travel, transport and computer services, as exports of services grew by 17.1% and imports fell by 13.6%. The overall foreign trade balance was in deficit by almost 200 million euros.
The seasonally adjusted GDP fell by 1.3% compared with the previous quarter and grew by 0.3% compared with the second quarter of 2021.
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 performing.
See also the national accounts section on our website.
More detailed data have been published in the statistical database.
For further information:
Helen Maria Raadik
Media Relations Manager
Marketing and Dissemination Department
Tel +372 625 9191