Regional growth lacking

  • 2010-10-06
  • Staff and wire reports

TALLINN - According to Statistics Estonia, the economic activity of Estonia is concentrated in Harju, Tartu and Ida-Viru counties, which create nearly three quarters of the gross domestic product of Estonia, reports news agency LETA. In 2008, the share of Harju, Tartu and Ida-Viru counties was 78 percent of the total GDP of Estonia.

The share of these three counties in overall GDP of Estonia has grown year by year, as just 12 years ago, in 1996, their share was only 72 percent. Over a half of overall GDP is still created in Harju county, 60 percent in 2008. However, the share of Harju county has been declining gradually during the last three years on account of the rise of Ida-Viru and Tartu counties. In 2008, the share of the GDP in Ida-Viru county rose mainly due to a strong industrial sector. The growth in the share of GDP in Tartu county was influenced by the increase in the proportion of the service sector. In 2008, 10 percent of Estonian GDP was created in Tartu county and 8 percent in Ida-Viru county.

In every county except for Ida-Viru county the service sector is holding the biggest share. Over the years it can be observed that the share of the primary sector in counties is decreasing in favor of industrial and service sectors. Ida-Viru county, which belongs to the three counties with the highest GDP, however, has created over a half of the value added in the industrial sector. The share of the industrial sector in general has increased in Ida-Viru county since 1996. This reflects the significant role of mining and quarrying, electricity and manufacturing in the county’s economic activity.

Regional GDP (RGDP) characterizes first and foremost the economic development of a county, but it does not directly function as an indicator of wealth. RGDP does not reflect the population’s income and expenditures, the access to education and health care, etc. However, regional GDP allows evaluating the distribution of wealth between regions and it is a suitable indicator for setting the regional policy-related targets and for determining the efficiency of their achievements.

The primary sector covers agriculture, hunting, forestry and fishing. The industrial sector, or secondary sector, includes mining and quarrying, manufacturing, electricity production, gas and water supply and construction. The service, or tertiary, sector includes the wholesale and retail trade, hotels and restaurants, transport, storage and communications, financial intermediation, real estate, renting and business activities, public administration and defense; compulsory social security, education, health and social work, other community, social and personal service activities.