General government continued in small deficit

According to the preliminary data of Statistics Estonia, in 2017, the Estonian general government deficit was 0.3% and the gross debt level was 9% of the gross domestic product.

At the end of 2017, the total expenditures of the general government exceeded the revenues by 66.1 million euros, accounted as the Maastricht deficit criteria. The central government as well as the local government sub-sectors ended the year in deficit. The budget surplus of social security funds increased to 58.9 million euros. By the end of 2017, the deficit of the central government sub-sector was 67.4 million euros and the consolidated budget of the local government sector was 57.6 million euros in deficit.

The consolidated debt of the general government (Maastricht debt) amounted to slightly over 2 billion euros by the end of 2017, having risen by 4% compared to 2016. The debt level increased in the local government as well as the central government sub-sectors. At the end of 2017, the debt of the central government sub-sector totalled 2.3 billion euros, of which 898 million euros were liabilities towards other sub-sectors.

The share of foreign debt in the central government’s loan liabilities was 49%. Long-term loan liabilities decreased by 3% year on year. The volume of long-term securities issued by the public legal institutions, foundations and enterprises belonging to the central government was 98.6 million euros and it increased by 83% compared to the previous year.

The overall debt level of the local government sub-sector increased by 7% compared to 2016 and stood at 0.8 billion euros at the end of 2017. The volume of long-term securities decreased by 1% and loan liabilities increased by 9% year on year. Liabilities towards the rest of the world accounted for 22% of the local government debt.

Social security funds did not contribute to the debt of the general government sector.

Surplus/deficit of the general government in Estonia by sub-sectors, 2008–2017

In Estonia, the general government sector comprises three sub-sectors: 1) central government (state budget units and extra-budgetary funds, foundations, legal persons in public law); 2) local governments (city and rural municipality governments with their subsidiary units, foundations); 3) social security funds (Estonian Health Insurance Fund, Estonian Unemployment Insurance Fund).

Eurostat publishes the data on the preliminary debt and deficit levels of the Member States on 23 April 2018.

Source: Statistics Estonia

The closure of Versobank has little effect on the Estonian economy

  • The Estonian banking sector as a whole is stable and strong
  • Deposits at Versobank account for 1.5% of all the deposits in banks operating in Estonia
  • Versobank had 253 million euros of deposits, 87% of them held by non-residents

The closure of Versobank after its breach of anti-money laundering rules will have very little impact on the Estonian economy and banking as Versobank had only a marginal market share and the majority of the deposits in the bank are owned by non-residents.

Deputy Governor of Eesti Pank Madis Müller said that Versobank, which was closed for persistent breaches of anti-money laundering rules, was not a systemically important bank for Estonia. “The Estonian banking sector as a whole is stable and strong. The closure of Versobank shows that oversight of Estonian banks is effective and Estonia will not tolerate breaches of anti-money laundering rules”.

Versobank had a marginal share of the market and mainly handled services for clients from outside Estonia. At the end of last year, clients had around 253 million euros of deposits in Versobank, which is equal to only 1.5% of all the deposits in banks operating in Estonia. Of the deposits in Versobank, 87% were held by non-residents.

“Before the operating licence was withdrawn from Versobank, the Financial Supervision Authority carried out on-site inspections four times since 2015 and wrote an injunction requiring shortcomings to be eliminated. The closure of Versobank is a message that there is no place for money laundering in Estonian banking”, said Mr Müller, who is also a member of the supervisory board of the Financial Supervision Authority.

Suspicions about money laundering have touched banks operating in Estonia and Latvia in recent years. The Financial Supervision Authority uncovered serious shortcomings at the Estonian branch of Danske Bank in 2014 and wrote an injunction in 2015 requiring them to be eliminated. Danske responded to this by closing its problematic business lines aimed at risky non-resident clients. An additional independent enquiry has now been opened at the head office level of Danske Bank looking at banking transactions in the whole period from 2007 to 2015. The third largest bank in Latvia, ABLV, also came under suspicion of money laundering recently and the liquidation of the bank was initiated at the end of February this year.

Deposits of non-resident companies and household clients in the Baltic states are largest in Latvian banks and smallest in Lithuania. At the peak in 2014, 56% of all the deposits in Latvian banks were deposits of non-residents. This share had fallen to 41% by 2017. The share of non-resident deposits in bank deposits in Lithuania is only 2.8%. The share of deposits in Estonia held by foreign non-financial sector companies and households has been declining steadily, and it fell from a peak of 21% in 2012 to 8.5% by 2017.

More information about compensation of the deposits of Versobank clients and the liquidation of the bank can be found on the website of the Financial Supervision Authority.

Source: Bank of Estonia

See graph here (The share of non-resident household and non-financial sector corporate deposits)

Demand from households for loans remains strong

  • Estonian companies were active in borrowing from banks and leasing companies operating in Estonia
  • The share of loans overdue for more than 60 days in the loan portfolio was below 1%
  • Bank deposits continued to grow rapidly and were up 10% on February 2017

Estonian companies borrowed actively in early 2018 from banks and leasing companies operating in Estonia in the same way as at the end of last year. Borrowing activity was boosted by somewhat higher investment and the good access to domestic bank loans. Some 30% more was taken in new long-term loans and leases in the first two months of the year than in the same months of last year. Companies in almost all sectors took out more long-term loans than a year earlier, and the largest taker of the new loans was the real estate and construction sector. The portfolio of corporate bank loans was still smaller than a year ago though, as one bank transferred a part of its loans to the portfolio of its foreign parent bank in the autumn. Without this the portfolio of corporate loans, leases and factoring would have grown by 6-7% over the year.

Demand from households for loans remains strong. The yearly growth in the portfolio of loans and leases to households accelerated to 7.7% in February. Housing loans, consumption loans and car leases were all taken out more than previously. The amount taken in new housing loans was 14% more in February than a year earlier, and the portfolio of housing loans increased by 6.9% over the year to 7.1 billion euros. The car lease portfolio grew by 19% over the year. The growth in car leases has partly been driven by the change that came in from the start of 2018 to the taxation of vehicles owned by companies, which has led to company cars being registered to private individuals. The yearly growth in the portfolio of overdrafts and credit card loans slowed to 1.7%.

The average interest rates on new loans have risen slightly at the start of this year. The average interest rate on new housing loans issued in February was 2.3%, which is similar to the average rate last year. The average interest rate on new long-term corporate loans was 2.6% in February. The average interest rate depends largely on which companies have signed loan contracts for which projects in the particular period, and so can fluctuate quite widely.

The good state of the economy and low interest rates mean that the loan quality of the banks remains good. There were 146 million euros of overdue loans to companies and households at the end of February, accounting for only a small share of the portfolio at less than 1%. The share of loans that are overdue was smaller than in February 2016 in almost all sectors.

As companies and households have borrowed extensively, so financial buffers have also continued to increase. The bank deposits of Estonian companies and households grew by 10% over the year to 13 billion euros. Growth in the deposits of households has been built on strong growth in incomes. Deposits grew a little more slowly in February than at the end of last year, but at a rate that is still rapid. The bank deposits of households grew by 9.4% over the year to 7 billion euros, while the deposits of companies were up 11% over the year in February.

 See graph here
Source: Bank of Estonia
Author: Mari Tamm, Economist at Eesti Pank

All card payment terminals will be able to handle contactless payments by 2020

The latest review of the payments market by Eesti Pank states that all card payment terminals should be able to handle contactless payments by 2020. More and more innovative solutions will appear in Estonia alongside the traditional payment solutions.

“The development in the global and Estonian payments markets in the past 30 years has been impressive. We were proud in Estonia in 1992 that banks started to use electronic settlements between themselves, then a year later the first bankcards were issued in Estonia. Today we can make contactless payments and during this year residents of Estonia will be able to make instant interbank payments”, said Mihkel Nõmmela, Head of the Payment and Settlement Systems Department.

He explained that only SEB Pank is currently offering instant payments to its customers in Estonia, while the other banks are introducing the system. “When all the banks bring instant payments to the market, both private individuals and companies will gain as money starts to move between banks in only seconds”.

Contactless payments are made with a bankcard, where the card does not need to be inserted into a terminal and confirmed with a PIN code, but only held near to the terminal. Contactless payments make paying quicker and so shorten the time spent waiting in queues. Upper limits are set on payments for security reasons, and payments up to that limit can be made without entering a PIN code. The upper limit on contactless payments in Estonia has currently been set at 25 euros. To protect client security, the PIN can also be requested when a contactless payment is made.

Contactless payments have been possible in Estonia since 2016, when the banks started to issue contactless cards and upgrade payment terminals. By September 2017, 17% of all the cards issued in Estonia were enabled for contactless payments, and by the end of the year 85% of card terminals could take contactless payments.

The first contactless card in Europe was issued in 2007 in the United Kingdom, where one card in four is now contactless. The countries where contactless cards are most common are the Czech Republic, Poland, Hungary and Slovakia.

Source: Bank of Estonia

Rapid economic growth is likely to give a boost to inflation

  • Inflation decelerated in February because of the higher reference base for prices of energy and food
  • Rapid economic growth is likely to give a boost to inflation
  • A rise of 3% in the price of the consumer basket can be expected in 2018

Data from Statistics Estonia show the cost of living was 3.1% higher in February 2018 than a year earlier, which is slightly less than the 3.5% recorded for January. Inflation remained subdued in the euro area at 1.2% in February, which is below the 2% target of the European Central Bank.

Inflation fell in Estonia in February mainly because of the higher reference base, as the largest increase in food prices came more than a year ago.

Food price inflation on global markets has now slowed and lower prices for some food groups have now passed into consumer prices. The price of butter has fallen by 6% in three months for example. However, the rise in prices of fruit and vegetables, which are more expensive in the winter months for seasonal reasons, was larger than usual. The rise of 18% in fruit prices in Estonia was one of the largest in the European Union.

The Estonian economy has grown exceptionally fast recently and the growth has been broadly based. It could be expected in consequence that inflation would be fairly even across groups of goods. However, the rise in consumer prices has again mainly been limited to higher prices for energy and food. Inflation for services and consumption goods was only 1% in February, though rising wages and company profits will probably start to raise those prices in the medium term. Inflation has been restrained to some degree by the recent strengthening of the euro against the US dollar. The overall consumer basket is forecast to rise in price by around 3% this year.

Inflation in Estonia and euro area

Source: Bank of Estonia

Author: Sulev Pert, Economist at Eesti Pank

2017 was a good year for exports

The year 2017 was a successful one for the Estonian economy. The economy grew at a clearly faster rate than in previous years. Growth was boosted by the industrial sector, which is focused on exports, and by branches of the economy that serve domestic demand. The real growth in exports was less than in 2016, though this was due to a reduction in exports from one branch of industrial production. Investment finally started to increase in both the business and government sectors. Only investment by households remained the same as a year earlier. Against this background the current account surplus increased to 734 million euros, or 3.2% of GDP. The growth in passenger transport by air and information and computer services boosted the surplus in exports and imports of services by around one fifth. Alongside the growth in the surplus in the goods and services account, the surplus in the current account was also increased by fines received from abroad. The outflow of investment income was at about the same level as in the previous year, which indicates that the profit earned by companies based on foreign capital had not increased during the year.

More direct investment was made in Estonia from abroad than was made abroad from Estonia. New direct investment of around one billion euros was made in the equity capital of foreign-owned companies in 2017, which is around double the amount seen in the past four or five years. At the same time earlier investments were reduced by about the same amount, so overall there was no net flow of new money into the country. The reinvestment by non-financial companies of profits earned earlier in Estonia meant that the inflow of direct investment was still larger than the outflow, and it was at the same level as a year earlier.

Estonian assets abroad grew more than liabilities in 2017, and so Estonia was a net lender. As the current account has been in surplus for some time, there is money available in the Estonian economy that is being placed abroad more and more. In consequence, Estonia’s net international investment position, which is the difference between the foreign assets and liabilities of the country, has moved steadily towards balance. In 2017 it stood at around -30% of GDP.

Source: Bank of Estonia
Author: Kristo Aab, Economist at Eesti Pank

Beer price has increased by 27 pct in a year

According to Statistics Estonia, the change of the consumer price index in February 2018 was 0.9% compared to January 2018 and 3.1% compared to February of the previous year.

Compared to February 2017, goods were 3.5% and services 2.4% more expensive. Regulated prices of goods and services have risen by 6.4% and non-regulated prices by 2.2% compared to February of the previous year.

Compared to February 2017, the consumer price index was affected the most by food and non‑alcoholic beverages, which became 5% more expensive, contributing over a third of the total increase of the index. Fruit was 18.2% and milk, dairy products and eggs 7% more expensive. Alcoholic beverages and tobacco accounted for nearly a quarter of the total increase of the index. 60% of the impact of alcoholic beverages and tobacco came from beer, which was 27% more expensive. Motor fuel contributed a ninth of the total increase. Petrol was 7% and diesel fuel 4.6% more expensive than in February 2017. Compared to the same month of the previous year, of food products, the biggest price increases were seen for eggs (41%), frozen fruit and berries (37%) and butter (25%).

Compared to January 2018, the consumer price index was affected the most by a 5.3% price increase of electricity that reached homes. 0.8% more expensive food, 2.9% more expensive alcoholic beverages and the ending of seasonal sales of clothing and footwear also had a greater impact on the index.

Change of the consumer price index by commodity groups, February 2018
Commodity group February 2017 – February 2018, % January 2018 – February 2018, %
TOTAL 3.1 0.9
Food and non-alcoholic beverages 5.0 0.7
Alcoholic beverages and tobacco 10.6 2.2
Clothing and footwear 0.9 2.7
Housing 4.2 1.2
Household goods 0.8 0.2
Health 3.0 0.8
Transport 0.6 0.4
Communications -5.6 -0.2
Recreation and culture 2.0 1.3
Education -4.7 -0.1
Hotels, cafés and restaurants 5.0 1.0
Miscellaneous goods and services 2.9 0.5

Statistics Estonia publishes the consumer price index on the 5th working day of each month, after the end of the reporting period. For the statistical activity “Consumer price index”, the main representative of public interest is the Ministry of Finance, commissioned by whom Statistics Estonia collects and analyses the data necessary for conducting the statistical activity.

Source: Statistics Estonia

Estonian average salary was 1,221 euros in 2017

According to Statistics Estonia, in 2017, the average monthly gross wages and salaries were 1,221 euros; compared to 2016, the average monthly gross wages and salaries increased 6.5%. The annual average monthly gross wages and salaries increased in almost all economic activities. The average monthly gross wages and salaries were the highest in the 2nd and 4th quarters.

While in 2016, the annual increase in the average monthly gross wages and salaries was 7.6%, the growth slowed down in 2017, dropping close to the level of 2014 and 2015, when the annual increase remained at around 6%.

In 2017, the annual increase in the average monthly gross wages and salaries was the slowest in the 1st quarter, accelerating near the year-end.

Real wages, which take into account the influence of the change in the consumer price index, increased compared to 2016, due to growing consumer prices, slower than the average monthly gross wages and salaries. Compared to 2016, real wages rose by 3%. While in 2016, real wages increased almost as fast as the average monthly gross wages and salaries, the growth in real wages slowed down in 2017.

In 2017, compared to the previous year, irregular bonuses and premiums per employee remained relatively stable, increasing 1.7%. Without irregular bonuses and premiums, the average monthly gross wages and salaries increased 6.7%.

In 2017, the average monthly gross wages and salaries continued to be the highest in information and communication (2,094 euros) and in financial and insurance activities (1,996 euros), and the lowest in other service activities, where the average monthly gross wages and salaries were almost three times smaller.

The year-over-year increase in average monthly gross wages and salaries was the fastest in mining and quarrying (11.1%), information and communication (10.2%) and energy (9.1%). The average monthly gross wages and salaries increased in almost all economic activities, excluding agriculture, forestry and fishing, where the average monthly gross wages and salaries remained close to the level of 2016 (0.4%).

In the public sector, including state and municipal institutions and enterprises, the average monthly gross wages and salaries amounted to 1,265 euros (year-over-year growth 7.9%), and in the private sector, including enterprises owned by Estonian and foreign private entities, to 1,206 euros (year-over-year growth 6.1%).

In 2017, by county, the average monthly gross wages and salaries continued to be the highest in Harju (1,353 euros) and Tartu (1,215 euros) counties and the lowest in Hiiu (883 euros) and Saare (876 euros) counties. The year-over-year growth in monthly gross wages and salaries was the fastest in Rapla, Ida-Viru and Võru counties. The average monthly gross wages and salaries remained relatively constant compared to 2016 in Hiiu, Lääne and Saare counties.

According to the Wages and Salaries Statistics Survey, in 2017, compared to the previous year, the number of employees converted to full-time units increased 4%. The biggest year-over-year increase in the number of employees in full-time units occurred in real estate activities, administrative and support service activities, agriculture, forestry and fishing, and in information and communication. The economic activities that saw a decrease in the number of employees in 2017 include transportation and storage, professional, scientific and technical activities, and public administration and defence; compulsory social security. In 2017, compared to 2016, the number of employees converted to full-time units decreased in state institutions and enterprises (2%) and increased the most in enterprises owned by Estonian private entities (7%).

In 2017, the average hourly gross wages and salaries were 7.40 euros; compared to 2016, the hourly gross wages and salaries increased 7.2%.

In 2017, the average monthly labour costs per employee were 1,648 euros and the hourly labour costs 10.99 euros. Compared to 2016, the average monthly labour costs per employee increased 6.5%.

4th quarter of 2017

The average monthly gross wages and salaries were the highest in the 4th quarter – 1,271 euros, having increased 7.5% compared to the 4th quarter of 2016. The average monthly gross wages and salaries were 1,231 euros in October, 1,251 euros in November and 1,330 euros in December. In the 4th quarter of 2017, the average hourly gross wages and salaries were 7.67 euros, having increased 8.3% compared to the 4th quarter of 2016.

In the 4th quarter of 2017, compared to the 4th quarter of 2016, the average monthly gross wages and salaries increased the most in real estate activities (14.4%), financial and insurance activities (14%) and in public administration and defence; compulsory social security (13.4%). The annual increase in average monthly cross wages and salaries was the slowest in arts, entertainment and recreation (1.8%) and in transportation and storage (2.7%).

In the 4th quarter of 2017, compared to the 4th quarter of 2016, irregular bonuses and premiums increased 11.4% per employee. Irregular bonuses and premiums affected the year-over-year increase in average monthly gross wages and salaries of the 4th quarter by 0.2 percentage points. Without irregular bonuses and premiums, the average monthly gross wages and salaries increased 7.3% compared to the 4th quarter of 2016.Average monthly gross wages and salaries per employee and their change by economic activity, 2016–2017

Statistics Estonia conducts the Wages and Salaries Statistics Survey on the basis of an international methodology since 1992. In 2017, the sample included 12,349 enterprises, institutions and organisations. The average monthly gross wages and salaries have been given in full-time units to enable a comparison of different wages and salaries, irrespective of the length of working time. Calculations of the monthly gross wages and salaries are based on payments for time actually worked and remuneration for time not worked. The hourly gross wages and salaries do not include remuneration for time not worked (holiday pay, benefits, etc.). In short-term statistics, the average gross wages and salaries are measured as a component of labour costs. Labour costs include gross wages and salaries, employer’s contributions and employer’s imputed social contributions to employees.

The statistics are based on the questionnaire “Wages and salaries”, the deadline of which was 18 January 2018. Statistics Estonia published the quarterly summary in 30 working days. For the statistical activity “Wages and salaries”, the main representative of public interest is the Ministry of Economic Affairs and Communications, commissioned by whom Statistics Estonia collects and analyses the data necessary for conducting the statistical activity.

Source: Statistics Estonia (see better graph here)

The profit of the business sector increased by 5 pct in 2017

According to the preliminary data of Statistics Estonia, in 2017, the total profit of the business sector was 2.8 billion euros, which is 5% more than the year before.

Compared to 2016, total profit increased in most economic activities. Manufacturing and transportation and storage enterprises made the biggest contribution to the total profit of the business sector. The growth in the sector’s profit was negatively affected mainly by real estate and wholesale enterprises. The profit of manufacturing increased by approximately a third compared to 2016, mainly due to an increase in profits in the manufacture of electronics, fuel oil and food products.In 2017, enterprises sold goods and services for 55 billion euros, which is 10% more than the year before. The biggest increase occurred in the turnover of enterprises specialising in water supply, sewerage, waste management and remediation activities. The turnover of trade and manufacturing enterprises, which have the biggest share in the total turnover of the business sector, increased 8% and 5%, respectively.

Compared to 2016, the total expenditure of enterprises increased 10%, including 9% increase in labour costs. The number of persons employed and the number of hours worked increased 3% and 2%, respectively. In 2017, the labour productivity of the business sector on the basis of value added amounted to an average of 22,600 euros per person employed, i.e. 5% more than in 2016.

In 2017, enterprises invested 2.4 billion euros, which is 15% more than the year before. As in 2016, the investments were made mostly in machinery and equipment, and buildings and civil engineering works. The main investors were manufacturing, transportation and storage, and trade enterprises, accounting for nearly a half of the total investments of all enterprises. Compared to 2016, all investments increased, with the biggest increase registered in investments in computer systems.

In the 4th quarter of 2017, enterprises sold goods and services for 14.5 billion euros, which is 10% more than in the same period of 2016. In the 4th quarter of 2017, enterprises invested 672 million euros, i.e. a tenth more than in the 4th quarter of 2016.

Total profit of the business sector, 2002–2017

The statistics are based on the questionnaire “Economic activity, quarter”, the submission date of which was 21 January 2018. Statistics Estonia published the quarterly summary in 26 working days. For the statistical activity “Financial statistics of enterprises (quarterly)”, the main representative of public interest is the Ministry of Economic Affairs and Communications, commissioned by whom Statistics Estonia collects and analyses the data necessary for conducting the statistical activity.

Source: Statistics Estonia

Estonian GDP increased by 4.9 pct in 2017

According to Statistics Estonia, in 2017, the gross domestic product (GDP) of Estonia increased 4.9% compared to 2016. In the 4th quarter of 2017, the Estonian economy grew by 5.0% compared to the 4th quarter of 2016.

2017

In 2017, the GDP at current prices was 23 billion euros.

The economic growth in 2017 was the fastest in five years. Main contributors to the broad-based growth were construction, information and communication, and professional, scientific and technical activities. The contribution of manufacturing grew gradually throughout the year. No economic activity had a strong negative impact on the economic growth. Also agriculture, which had been hindering the economic growth since the 2nd quarter of 2016, began to grow in the second half of 2017. At the same time, trade, which had driven economic growth in 2016, became the biggest drawback to the growth in the second half of 2017.

Supported by programming and software development, the value added of information and communication grew by 15.6%. The value added of professional, scientific and technical activities grew at almost the same rate – 13.9%. The value added of Estonia’s largest economic activity, manufacturing, grew despite modest results in the 2nd quarter at the fastest pace in three years – by 3.9%. The value added of trade, which went into decline in the second half of the year, grew only by 1.8%.

Net taxes on products did not grow significantly in 2017. Due to an increase in tax revenue, their growth at current prices was 5.4%, but the growth corrected for inflation was only 0.1%.

Despite the modest increase in the middle of the year, exports of goods and services grew 2.9% in 2017. The main contributor was the still solid growth in the exports of services, which reached 6.2%. This was mostly due to the exports of transport and computer services. The main hindrance to the exports of goods was the decline in the exports of electronic equipment. The imports of goods and services grew by 3.5%. The most significant contributor to this was the imports of vehicles. Net exports reached 980 million euros in 2017, which is 4.3% of the GDP. This is the largest share in the GDP in six years.

The growth in domestic demand accelerated for the second consecutive year, reaching 4.2%. This was led by the growth in investments (13.1%), which had been in decline for the past three years. Compared to 2016, investments grew in almost every sector and economic activity. The biggest impact on the GDP came from the investments in machinery and equipment by the government sector (0.4%), and in other buildings and structures by the government sector (0.5%) and nonfinancial enterprises (0.4%). Final consumption of households grew by 2.0% in 2017. The final consumption expenditures of the government sector grew by 0.8%, supported by the EU presidency.

In 2017, the growth of the GDP surpassed the growth of the number of hours worked and persons employed for the second consecutive year. As a result, productivity per hour worked grew by 1.9% and per person employed by 2.1%. While at current prices, the increase in labour costs slowed down a bit, unit labour cost grew by 3.6%.

4th quarter of 2017

In the 4th quarter of 2017, the Estonian GDP at current prices was 6.1 billion euros.

The Estonian economy grew by 5.0% compared to the 4th quarter of 2016. The seasonally and working-day adjusted GDP grew by 2.2% compared to the previous quarter and by 5.3% compared to the 4th quarter of 2016.

The main contributors to the economic growth were information and communication, professional, scientific and technical activities, and manufacturing. Energy and transportation also had a significant positive impact. The main hindrance to the economic growth were wholesale and retail trade, and real estate activities.Contribution to GDP growth, 4th quarter 2017

Domestic demand grew by 4.5% in the 4th quarter. The growth in investments slowed down significantly to 5.8% compared to the same period of the previous year. Main contributors to the growth were the investments in buildings and structures and in telecommunication equipment by nonfinancial enterprises, and investments in machinery and equipment and in defensive structures by the government sector. The final consumption of households grew by 2.6%.

The exports of goods and services grew by 3.4% compared to the same period of the previous year. The main contributors to the growth were the exports of chemicals and chemical products and electrical equipment. The same goods also contributed to the growth of the imports of goods and services, which grew 4.2%. Also the imports of vehicles increased significantly. The share of net exports in the GDP was 3.6%.

Both the number of hours worked and persons employed grew at the fastest pace in six years. As a result, the productivity per hour worked grew only by 0.5%, and the productivity per person employed fell by 0.4%. Unit labour cost grew by 3.7% in the final quarter of the year.

For the statistical activity “National accounts”, the main representative of public interest is the Ministry of Finance, commissioned by whom Statistics Estonia performs this statistical activity.

Source: Statistics Estonia