Economic adjustment continues as expected

Andres Saarniit, Eesti Pank, economist

According to the flash estimate of Statistics Estonia, the third-quarter GDP was 15.3% smaller year-on-year. The difference is still big compared to the previous year, but the economic contraction has been steadily slowing. Compared to the second quarter, GDP was 2.8% smaller.

Since trading activity is resuming in the global economy, it is likely the exports of goods and services contributed the most to the recovery. But economic activity continues to be subdued in the sectors related to domestic demand.

The third-quarter result is in line with Eesti Pank's spring forecast, which expects this year's economic downturn to average to about 14%. In the last quarter of 2009, the year-on-year decline will be considerably smaller compared to the decline in the third quarter.