According to Statistics Estonia, the gross domestic product (GDP) of Estonia grew by 4.2% in the third quarter of 2018 compared to the same period of the previous year, with quarterly growth reaching EUR 6.5 billion at current prices.
The seasonally and working day-adjusted GDP increased by 0.4% QoQ. However, compared to the third quarter of 2017, the seasonally and working day-adjusted GDP grew by 3.9%.
The main contributor to economic growth continued to be the growth of value added in construction. This was followed by manufacturing, with the largest contribution in three years. Significant contributions to growth also came from professional, scientific and technical activities, information and communication, and transportation and storage activities.
Only one sector had a significant negative impact in the third quarter, namely agriculture, forestry and fishing. Mining and quarrying, which had a positive impact in the previous two years, had a negative impact in the third quarter.
The growth of domestic demand accelerated and reached 6.4%. This was significantly boosted by gross fixed capital formation, which increased by 4.2% after declining in the previous two quarters. The growth of investment was broad-based, the main contributors being investment into buildings and structures by enterprises as well as investment into machinery and equipment by the government sector. Growth of final household consumption decelerated in the third quarter and was 4.1%.
Exports of goods and services grew by only 0.8%, mainly due to just a 0.1% growth in the exports of goods. Exports of services grew by 2%. Exports of computers had the biggest positive impact, along with electronic and optical equipment, motor vehicles as well as the sale of computer and information services, and construction services.
In contrast, imports of goods and services continued to show strong growth at 6.1%. Imports of goods increased by 4.4%, and imports of services by 11.2%. This was influenced the most by imports of machinery and equipment not elsewhere classified, and pharmaceutical products as well as the buying-in of air transport and travel services. The share of net exports in GDP was 2.6% in the third quarter.
Along with overall economic growth, productivity indicators improved as well. Productivity per person employed grew by 3.4%, while productivity per hour worked by was up 7.6%. Unit labor cost showed its fastest growth in recent years, increasing under continuing wage pressure by 8.3%. (ERR/Business World Magazine)