Swedbank: Estonia: GDP growth outlook deteriorated faster than expected in Q2

• GDP expanded only 0.6% y/y (non-adjusted), but contracted 1.3% q/q (swda) in Q2, in real terms
• GDP nominal growth was still strong at 17.8% y/y.
• The largest positive contribution to the GDP growth came from ICT sector and professional services, whereas the largest negative contribution came from manufacturing and real estate activities.
• The growth of private consumption slowed to 4.8% in real terms, but picked up to 23% in nominal terms, the largest growth of the last 15 years.
• Total exports increased 5% in real terms with the support of the strong growth of export of services, whereas export of goods dropped in Q2.
• Inventories were still exceptionally large in Q2 and gave a strong contribution to the GDP growth.
• GDP has expanded 2.4% in H1 in real terms, but H2 is expected to be considerably weaker. Swedbank recent GDP forecast for 2022 is 1.7% and 0.5% for 2023.

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