Estonia’s fourth quarter gross domestic product (GDP) fell by 4.1 percent compared to the same period in 2021. This is a very large number and it is very difficult to match it from Europe, even in Sweden, where the economy is in a bad state, the decline was only 0.9 percent in the fourth quarter.
In the fourth quarter, the economic recession became broad-based, and only a few areas of activity showed growth.
According to Statistics Estonia’s lead analyst Robert Müürsepa, in the fourth quarter of 2022, GDP in current prices increased by 11.9 percent. “Although at the end of the year, rapid inflation showed some signs of slowing down, its impact on economic growth remained at a level similar to previous periods. Excluding price effects, both tax receipts and added value dropped significantly,” Müürsepp added.
All other major areas of activity also contributed negatively to the economy: real estate activity, construction, processing industry and trade. Vocational, scientific and technical activities, which are often one of the engines of the economy, also had a significant negative impact.
“Even though companies show strong growth on paper, this is due to rapid price growth, the effects of which, when removed, the volumes of the economy have still decreased,” explained Müürsepp.
Private consumption also continued to fall (-1.9 percent), which is the weakest result since the first quarter of 2021. Household spending on education, other goods and services, and home furnishings fell the fastest. Spending on food and healthcare also showed a significant decrease.
