Economic growth driven by ICT-sector

According to Statistics Estonia, the gross domestic product (GDP) of Estonia grew 4.3% in 2019. In the 4th quarter of 2019, the GDP grew 3.9% compared to the same period of the previous year. The Estonian GDP was 28 billion euros at current prices.

The high economic growth persisted from quarter to quarter, exceeding 4% for the third year in a row. The main contributor to the growth was information and communication, followed by wholesale and retail trade, and professional, scientific and technical activities. Manufacturing had a positive impact on the economic growth in the middle of the year, and the second half of the year saw a strong contribution from the previously modest agricultural sector. The only notable negative impact came from the energy sector.

Information and communication, finance and insurance, and professional, scientific and technical activities experienced the fastest growth in value added in a decade. Value added in information and communication grew as much as 28.6%. Value added dropped in mining and quarrying and in the energy sector.
Domestic demand grew at the fastest rate in seven years. The growth was led by investments that grew 13.1% mostly in the first half of the year. The growth of investments was broad-based and supported by all economic activities and sectors, except for the government sector. The biggest positive impact came from the investments of non-financial corporations into buildings and structures and transportation equipment. Households’ investments into dwellings were also notable. Household consumption grew 3.1%.

Exports grew 4.9%. The exports of goods and services grew at a similar pace. The main contributors were the sale of computer services and the export of motor vehicles and wood products. Imports grew 3.7%, mainly on account of the purchase of construction and transportation services.

The number of persons employed continued to grow and the productivity per person employed increased 3%. Productivity per hour worked increased 3.7%. The labour unit cost grew 4.6%.

In the 4th quarter of 2019, the seasonally and working day adjusted GDP grew 0.9% compared to the previous quarter. Compared to the 4th quarter of 2018, the seasonally and working day adjusted GDP grew 4%.

A notable portion of the economic growth came from information and communication. The growth was also supported by agriculture, fishing and forestry, and wholesale and retail trade. The energy sector continued to have a negative impact on the growth due to the warm winter. A notable positive impact, however, came from the net product taxes.

The growth of domestic demand, supported by investments, was 3.3%. Household consumption grew 1.7%.

Foreign trade experienced a small decline at the end of the year. Exports (–0.6%) and imports (–0.5%) declined at a similar pace and net exports remained positive at 2.1% of the GDP.

As the economic growth slowed slightly in the 4th quarter, so did the productivity. Productivity per person employed grew 2.6% and productivity per hour worked grew 3.8%. Unit labour cost increased 2.8%.

Statistics Estonia performs the statistical activity “National accounts” for the Ministry of Finance.