The Economy of Estonia Grew by 5.4% in the First Quarter
In the first quarter of 2021, Estonia’s gross domestic product (GDP) increased by 5.4% compared to the same quarter of the previous year. In current prices, GDP amounted to 6.9 billion euros in the first quarter, the Department of Statistics reported on Monday. Compared to the first quarter of last year, GDP, adjusted by the number of days worked, increased by 5 per cent and by 4.8 per cent compared to the last quarter of 2020.
According to analysts, almost half of the growth of the economy is due to the influence of taxes, especially the turnover tax (value added tax) and good excise revenues. “However, this does not mean exceptionally high tax receipts, but that the comparative base of the first quarter of last year was unusually low. Now we are back to the level of 2019,” explained Robert Muirsepp, the lead statistician of the Department of Statistics.
Trade, information and communication, as well as financial and insurance activities, had the most positive impact on economic growth. As with taxes, the positive impact of trade is visible against the backdrop of the recession that occurred at the same time last year. Coronavirus expenditures in the health sector and the energy sector in the colder winter also contributed to the growth of the economy.
Among the major industries, the manufacturing and construction sectors continued to have a negative impact on the economy, with coronavirus crisis a little later. Accommodation and food services were also in decline due to coronavirus restrictions.
Private consumption continued to decline throughout the year, with a decline of 3.3 per cent in the first quarter. Excluding the costs associated with tourism, consumption showed modest growth. As in previous periods, there was an increase in expenditures related to home lifestyles, communications, home furnishings and household goods. Expenditure on meals outside the home, leisure, transport, clothing and footwear continued to decrease. At the same time, spending on health increased, which was also supported by growth in the government sector.
In foreign trade, growth started late last year and continued in the same direction. Merchandise exports increased by 5 per cent and imports by 12 per cent. Imports and exports of wood products, electronics and motor vehicles contributed to the increase in trade. In services, computer services have had the most positive impact. External trade in tourism services continued to decline, but transport services are gradually recovering.