Estonian GDP expanded 3.6% y/y in the second quarter, shedding 0.9pp from the annual expansion recorded in January-March, unadjusted data from Statistics Estonia showed on August 30. 

The economic expansion in the second quarter arrived on the back of investment growing 24.6% y/y, 4.2pp above the annual rate of investment growth in the previous three months, data showed. 

Overall, domestic demand growth came in at 6% y/y, impeded to an extent by a slowdown in consumption, which expanded just 1% y/y in April-June

While weakening to an extent, the performance of the 1.1mn-economy remained solid in the second quarter and may lead to upward revisions of outlooks for the overall GDP expansion in 2019. 

The European Commission currently forecasts the Estonian economy to grow just 2.8% this year, down from 3.9% in 2018 but it could publish a revised outlook in October. Swedbank also hints at revising its autumn forecast for Estonia while SEB forecasts growth of 3%, up from 2.8% expected earlier this year.

Seasonally and working-day adjusted, GDP expanded 3.8% y/y in the second quarter while adding 0.4% q/q. In nominal terms, GDP equalled €7.1bn in April-June in current prices.

In terms of sectoral contribution, information and communication proved the top segment. Professional, scientific, and technical activities, wholesale and retail trade, and manufacturing also contributed positively, on top of five other segments.

Electricity, gas, steam, and air conditioning supply impeded the first quarter’s growth the most, data showed. Construction, mining and quarrying, and real estate also dragged down on the economy.