Flash comment: Estonia - February 10, 2012: Economic growth slowed significantly in the last quarter of 2011

1. Flash comment: Estonia
Economic commentary by Economic Research Department Feb 10, 2012
Economic growth slowed significantly in the last quarter of 2011
Economic growth According to preliminary flash GDP estimate released by Statistics
12% Estonia, economic growth slowed significantly in the fourth quarter
quarterly grow th, s.a.
annual grow th of last year. For the first time in two years, a quarterly GDP decline
8%
was reported, namely by 0.8%. As a result, the annual growth
4% slowed to 4%, from 8.5% reported in the third quarter. Thus, the
average growth in 2011 is estimated at 7.5%.
0%
-4%
2007 2008 2009 2010 2011 The main reason behind slower growth was the slowdown in
exports and manufacturing output growth. Manufacturing, which
-8% saw a rapid increase in external demand during the second half of
-12%
2010 and first half of 2011 (mostly founded on electronics sector),
has now reached its highest output levels. Thus, additional rapid
-16% growth is rather limited – slowdown in exports was expected and
-20%
will continue. Production in the last quarter was probably also
affected by disruptions in the supply chain (e.g. Japan nature
disasters, Thailand floods). Fall in the overall global confidence had
Output volumes, annual growth, %
its impact as well.
40
Nevertheless, domestic demand held strong – growth was
30
continuously high in both retail as well as construction sectors.
20 Growth was strong in several smaller sectors as well – information
10
and communication, and agriculture and forestry. Unusually mild
weather might have also played a role in fourth quarter results – on
0 one hand it weakened the demand for energy consumption, but on
2007 2008 2009 2010 2011 the other hand it boosted construction works as well as private
-10
consumption (due to smaller expenditures on housing).
-20
-30
Second GDP estimate with detailed sector breakdown will be
published on 9 March.
-40 retail industry construction
Confidence indices, pts
40 Annika Paabut
Chief Economist
20
+ 372 6 135 440
annika.paabut@swedbank.ee
0
2008 2009 2010 2011 2012
-20
-40
-60 industry
retail
construction
-80 services
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