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Wednesday, May 14, 2008

Estonia GDP Q1 2008 (preliminary)

In fact, we can only at this point say something decisive about Latvia and Lithuania since Estonia has not yet posted Q1 08 figures.
Claus Vistesen earlier this week in his Have the Baltics Entered a Recession? post

Well, now we can finally help Claus out, since today Estonia has posted its Q1 2008 GDP growth data, and it is pretty unambiguous: Estonia is in recession, which means that all three Baltic economies are now in all probability in recession.

In fact Estonia's economy more or less stalled in the firs t quarter , with the economy growing at a preliminary year on year rate of just0.4 percent. This was the weakest year on year number to be registered since a 1 percent contraction in the third quarter of 1999, and follows 4.8 percent growth in the previous quarter, according to data realeased by the Tallinn-based statistics office this morning.

And this isn't really the worst part, since seasonally adjusted GDP at constant prices decreased by 1.9% in the 1st quarter of 2008 compared to the 4th quarter of 2007. That is the economy clearly contracted in the fisrt quarter of 2008 and is, IMHO, now undoubtedly in recession.

Estonian consumer confidence fell in April to minus 16, matching the lowest level in 3 1/2 years that it hit in February on worsening expectations over national and personal finances, the Tallinn-based Institute of Economic Research said on April 28. Property sales fell to the lowest level in four years in the first quarter, the Tallinn-based Land Board said on April 9.

``With huge external imbalances, we believe that the Estonian economy faces a number of years of sub-trend growth to reduce these excesses,'' Violeta Klyviene, the senior Baltic analyst at Danske Bank A/S, said before the report.

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