Estonian GDP breaks 10 percent barrier in 3Q

  • 2006-01-04
  • By TBT staff
TALLINN - The Statistical Office reported last week that Estonia's economy expanded 10.6 percent in the third quarter of 2005, slightly lower than projections though high enough to place the country at the top of the EU25 in terms of quarterly growth.

According to the office's preliminary calculations, July 's September GDP amounted to 43.2 billion kroons (2.76 billion euros) at current prices. The growth was triggered by gains in manufacturing, real estate, renting, business activities, wholesale and retail.

Analysts at the Statistical Office said that growth in exports exceeded that in imports, and this helped spur overall expansion. While domestic demand was a factor supporting growth, its share in GDP declined in comparison with 2004.

The Finance Ministry said last week that in the fourth quarter domestic demand continued to grow rapidly, and external demand was seen to be increasing as well. It estimated that annual growth for 2005 would amount to more than 9 percent

Annualized growth this year was 7 percent in the first quarter and 9.9 percent in the second quarter. It is believed Estonia will finish 2005 with the second largest GDP growth in the EU25, after Latvia.

Analysts at commercial banks agreed with the ministry that 2005 GDP would exceed the 2004 figure and surpass the 9 percent threshold. As Maris Lauri of Hansabank told the Baltic News Service, "It is possible that growth [slowed] down a bit in the fourth quarter, but it cannot be ruled out either that economic growth will turn out stronger. There are no particular signs indicating that growth has slowed down."

Anne Karik-Uustalu of Sampo Bank, also said the economic growth in 2005 was expected to be higher than 9 percent.