GDP falls at softest pace in over two years in Q2

GDP reading: GDP dropped at a slower rate of 1.0% year on year in the second quarter, above the 2.2% contraction tallied in the first quarter and marking the smallest fall since Q3 2022. On a seasonally adjusted quarter-on-quarter basis, GDP flatlined in Q2, compared to the previous quarter's 0.3% fall and marking the best reading since Q4 2021.

Drivers: On the domestic front, government consumption improved to a 1.1% expansion in Q2 (Q1: +0.6% yoy). Additionally, fixed investment rebounded, growing 7.9% in Q2, following the 9.6% contraction recorded in the prior quarter. Less positively, household spending shrank at a steeper pace of 1.3% year-on-year in Q2 from a 1.0% fall in Q1. Externally, exports of goods and services slid at a slower pace of 1.6% year on year in Q2, which marked the best reading since Q3 2022 (Q1: -7.6% yoy). In addition, imports of goods and services contracted at a milder pace of 0.3% in Q2 (Q1: -4.1% yoy), marking the best reading since Q4 2022. As a consequence, net exports remained positive for the third consecutive quarter.

How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects Estonian GDP projections for the next ten years from a panel of 15 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts and averaged to provide one Consensus Forecast you can rely on for each indicator. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable GDP forecast available for Estonian GDP.

Download one of our sample reports to visualize what a Consensus Forecast is and see our Estonian GDP projections.

Want to get access to the full dataset of Estonian GDP forecasts? Send an email to info@focus-economics.com.