FX.co ★ Estonian GDP Shrinks 0.3% in Q1

The Estonian economy experienced a contraction of 0.3% year-on-year in the first quarter of 2025, a downturn from a 1.2% growth observed in the previous quarter. The decline in private consumption, which fell by 0.6% after a 1.3% increase in the last quarter of 2024, contributed to this downturn. Fixed investments also decreased, albeit at a significantly reduced rate (-0.1% compared to -10.3% in the last quarter of 2024). Additionally, the country's GDP was adversely affected by net external demand, as the rise in exports (5.4% compared to 2.9%) was outpaced by an increase in imports (5.8% compared to 3.5%). Nonetheless, there was a rebound in government spending, which rose by 1.7% following a decline of 1.1%. From the production perspective, most sectors had a negative impact on economic activity, with notable declines in the energy sector, agriculture, and transportation. On a seasonally adjusted quarterly basis, the Gross Domestic Product contracted by 0.3% in the March quarter, following a revised growth of 0.2% in the prior quarter, marking the first economic contraction in five quarters.