TALLINN - Estonia's economy grew 11.7 percent over the first three months of the year in comparison to Q1 2005, slightly higher than official and analysts' expectations.
In current prices the GDP added up to 42.9 billion kroons (2.74 billion euros). As in previous years, growth was mainly based on domestic demand, which climbed by 13.4 percent.
The double-digit spurt was led by real estate, manufacturing, transport, warehousing and communications, as well as wholesale and retail trade. These sectors accounted for 63 percent of all added value in the economy.
Imports of goods and services grew faster than exports, growth amounting to 21.6 percent to 31 billion kroons and by 17.3 percent to 35 billion kroons, respectively.
Analysts said the result met their expectations and that the rate of growth should slow.
Sampo Pank analyst Anne Karik-Uustalu said that the economic growth figure was as the Statistical Office announced at the beginning of the month. "As earlier signaled by growth figures of retail trade and company investment, acceleration of economic growth was mainly due to the mounting speed of domestic demand," Karik-Uustalu said.
"As of the second quarter, the rate of economic growth will be slightly more affected by a higher basis of comparison, as growth acceleration of 10 's 11 percent started in the second quarter of 2005," Karik-Uustalu said.
Hansapank Markets' Maris Lauri also said numbers would slow. "At present, we expect the economic growth figure for this year to be 8.7 percent, and any possible rise in the forecast will be decided by mid-July," Lauri said. o
