Estonia’s economy slowed more than economists estimated in the first quarter to the weakest pace in three years as the construction industry stumbled.
Gross domestic product rose 1 percent from a year earlier, the smallest increase since the Baltic economy exited a recession in April-June of 2010 and down from a 3.7 percent pace in the fourth quarter, the statistics office, based in the capital, Tallinn, said today on its website. That fell short of all estimates in a Bloomberg survey of five analysts which had a median forecast of 3.6 percent. GDP shrank a seasonally adjusted 1 percent from the fourth quarter.
The $22 billion economy of the newest euro member is set to expand 3 percent this year, slowing from 3.2 percent in 2012 when it posted the European Union’s third-fastest growth rate, the Finance Ministry said last month. Construction decelerated last quarter as projects financed in the past two years by sales of United Nations’ carbon quotas were brought to an end.
“The start of the year was slow as public-sector investments probably declined and exports slowed somewhat,” Tonu Palm, a Tallinn-based economist with Nordea Bank AB, said before the data release. Still, “growth should accelerate in the second half thanks to the euro area and Scandinavia.”
Estonia, which adopted the euro in 2011, has weathered Europe’s debt crisis as Swedish and Finnish demand helped its economy recover from a 20 percent contraction in the wake of Lehman Brothers Holdings Inc.’s 2008 demise.
Export of goods, adjusted for inflation, accelerated to 13 percent in the first quarter, helped mainly by chemicals, electronics and transport, the statistics office said. Even so, shipments abroad shrank in both February and March, according to data the office published last week.
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