Estonian economy achieves fastest growth in five years in 2017

TALLINN, Feb. 28 (Xinhua) -- Estonia's gross domestic product (GDP) grew 4.9 percent year-on-year to 23 billion euros (about 28 billion U.S. dollars) last year, official statistics showed on Wednesday.

The economic growth was the fastest in five years. Main contributors were construction, information and communication, and professional, scientific and technical activities, according to the press release from Statistics Estonia.

No economic activity had a strong negative impact on the economic growth, it noted.

Agriculture, which had been hindering the economic growth since the second 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 growth in the second half of 2017, it added.

Supported by programming and software development, the value added of information and communication grew by 15.6 percent, while the value added of professional, scientific and technical activities grew by 13.9 percent, said the press release.

Despite modest results in the second quarter, manufacturing, Estonia's largest economic activity, grew at the fastest pace in three years by 3.9 percent, while the value added of trade, which went into decline in the second half of the year, grew only by 1.8 percent, it noted.

Due to an increase in tax revenue, growth of net taxes on products at current prices was 5.4 percent, but the growth corrected for inflation was only 0.1 percent.

Despite the modest increase in the middle of the year, exports of goods and services grew 2.9 percent in 2017. The main contributor was the continued solid growth in the exports of services, which reached 6.2 percent, mostly due to transport and computer services exports.

The main hindrance to goods exports was the decline in electronic equipment exports.

Net exports reached 980 million euros in 2017 -- 4.3 percent of the GDP -- the largest share of the GDP in six years.

The imports of goods and services grew 3.5 percent. The most significant contributor to this were vehicle imports.

The growth in domestic demand accelerated for the second consecutive year, reaching 4.2 percent, led by the growth in investments (13.1 percent), 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 investments in machinery and equipment by the government sector (0.4 percent), and in other buildings and structures by the government sector (0.5 percent) and non-financial enterprises (0.4 percent).

Household consumption grew 2.0 percent in 2017 and government expenditures grew 0.8 percent, 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 and per person employed grew 1.9 percent and 2.1 percent respectively.

While at current prices, the increase in labor costs slowed a bit, the unit labor cost grew 3.6 percent.

In the fourth quarter of 2017, the Estonian economy grew 5.0 percent compared to the same period of 2016. (1 euro=1.22 U.S. dollars) Enditem