Gross domestic product decreased in the 3rd quarter
According to the preliminary calculations of Statistics Estonia, the gross domestic product (GDP) decreased by 3.5% in the 3rd quarter of 2008 compared to the same period in the previous year.
In the 1st quarter of 2008, the economic growth was 0.2% and in the 2nd quarter -1.1%.
Compared to the 2nd quarter, the seasonally and working-day corrected GDP decreased by 0.9 %.
In the 3rd quarter of 2008 compared to the 3rd quarter of the previous year, the GDP was significantly influenced by the weak domestic demand, which decreased by 9.5%. The decrease in the main components of domestic demand, private consumption expenditures and capital investments, accelerated to -3.5% and -6%, respectively. Private consumption decreased in the majority of expenditure groups, except expenditures on housing, health, education and recreation. Gross fixed capital formation (investments less sales) decreased in households sector the most, mainly by the decrease in investments in dwellings. Gross fixed capital formation by non-financial corporations sector decreased by 3%, mainly in wholesale and retail trade and transport and storage activities. Gross fixed capital formation by general government sector increased (by 6%), although in decelerating pace. Investments were made mainly in construction.
Real growth rate of GDP and domestic demand, 1st quarter 2005 – 3rd quarter
The value added increased in public administration and defence, education, health, as well as in agriculture, forestry and fishing activities. However, the share of the referred economic activities accounted for only 16% of gross value added of total economy.
Real decrease of the value added of manufacturing, the economic activity having the biggest impact on GDP, did not deepen in the 3rd quarter (in the 2nd quarter -1.2%, in the 3rd quarter -1%). The decrease in the value added in manufacturing was mainly caused by small domestic demand and decrease of orders resulting from it. A significant impact was the decrease in the value added in the manufacture of wood and building materials. The value added increased primarily in the export-oriented branches of industry, mainly in the manufacture of metal products, electrical machinery and apparatus, chemical products and lubricating oils.
Fast deceleration of the growth of construction activity since the 2nd quarter of the previous year came down to the decrease in the value added of the activity (by -9.2%) in the 3rd quarter of the current year. The decrease of the value added of construction activity was influenced mainly by the decrease in construction of dwellings in the local market.
The value added of wholesale and retail trade decreased by 8.5%. The fall of sales in manufactured goods had the biggest impact on the decrease in the value added of retail trade. The value added created by the sales of motor vehicles and fuels started to decrease since the 4th quarter of the previous year. The decrease in the value added of the referred economic activity deepened even more in the 3rd quarter this year.
The decrease in the value added of financial intermediation deepened in the 3rd quarter. In the 2nd quarter the value added of the activity decreased by 1%, in the 3rd quarter by 8.2%. The decrease in financial and non-financial output of credit institutions together with the increase in costs and decrease in fees and commissions income of the activities auxiliary to financial services (incl. fund management activities) had the biggest impact on the fall of the value added of the financial intermediation activity.
In connection with the impeded production as well as consumption activity receipts of value added tax and excise taxes decreased.
Real growth rate of economic activities, 3rd quarter 2008
Exports of goods and services which had been decreasing since the 3rd quarter of the previous year increased in the 3rd quarter this year. The increase was mainly influenced by exports of goods which grew 8.9% in real terms, exports of services increased only 0.6%. Exports of refined petroleum products and basic metals, as well as electrical machinery and apparatus, chemical and agricultural products had the biggest impact on the increase in exports of goods. Refined petroleum products were re-exported after inward processing. Imports of goods and services decreased continuously in the 3rd quarter. The deficit of net exports in GDP was -2.3% in the 3rd quarter this year. This indicator has continuously improved since the 1st quarter of the previous year when it was -14.1%.
Real growth of domestic demand and exports and imports of goods and services, 1st quarter 2005 – 3rd quarter 2008
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More detailed data have been published in the Statistical Database.