According to Statistics Estonia, the gross domestic product (GDP) decreased by 3.2% at constant prices in the first quarter of 2023 compared with the same quarter a year earlier. The GDP at current prices amounted to 8.7 billion euros.
Robert Müürsepp, team lead of national accounts at Statistics Estonia, said that the GDP increased by 9.3% at current prices. “Although inflation is slowing, the impact of price rises on economic indicators remains strong. Both tax revenue and the decline in value added in all sectors except general government contributed negatively to the GDP,” Müürsepp said. At constant prices, tax revenue continued the downward trend of the previous quarter.
For the second quarter in a row, the agriculture sector was the main positive contributor to the economy. A significant contribution was also made by professional, scientific and technical activities. Of the larger activities, construction contributed slightly to the economy. The remaining activities either contributed modestly or had a dampening effect on economic growth. One of the largest negative contributors was information and communication. “This economic activity, which used to be one of the key drivers of the Estonian economy, has been playing the opposite role for two quarters in a row,” said Müürsepp. The energy sector had an equally strong impact. The economy was also held back significantly by transportation and storage, financial and insurance activities, real estate activities, and manufacturing.
Private consumption fell for the third quarter in a row, now at a slightly accelerating pace (−1.9%). Earlier trends continued, with the biggest decrease recorded in housing-related expenditures, while expenditures related to going out increased the most. In particular, expenditures on restaurants and hotels and on clothing and footwear went up. Running costs for water, electricity, etc. also increased.
In contrast to the rest of the economy, government consumption in the first quarter remained at the same level as in the same period of the previous year.
There was also a slight fall in investments, down by 3.4%. The biggest increase was recorded in households’ investments in dwellings, up by 63.7%. General government investments in other buildings and structures grew by 36.9%. The biggest falls were seen in enterprises’ investments in transport equipment (−91.7%) and in machinery and equipment (−49.8%).
Foreign trade continued to fall from record levels. Exports declined at a pace similar to the previous quarter (6.9%) and earlier growth came to an end also in imports, which decreased by 7.3%. The fall was led on both fronts by trade in goods, with energy and wood products having the biggest impact. “Forestry, electronic products, and electrical equipment stood out positively,” Müürsepp added. Exports of services grew slightly, by 2.5%, in the first quarter. The main contributors were maritime transport, computer services, and advertising services. Imports of services, however, declined (−1.9%) mainly due to freight rail transport and advertising services.
The seasonally and working-day adjusted GDP decreased by 0.6% compared with the fourth quarter and by 3.7% compared with the first quarter of 2022.
