GDP expanded 12.9% yoy and 4.3% qoq (SWDA) in 2Q- Economic output exceeded pre-pandemic peak by 6.7% in real terms
In Estonia, GDP grew 8.5% in the first half of 2021. The growth was among the fastest in the EU. In 2Q, over 60% of the growth came from three economic activities: manufacturing, transportation and ICT. After four quarters of contraction, private consumption turned to 12.5% growth yoy. Robust growth of investments (60% yoy) were largely contributed by Volkswagen software investments in its subsidiary. The pension reform will add over EUR 1 billion to households’ accounts in September of this year and this is expected to increase the momentum of economic growth this autumn and the effect will be felt in 2022, as well. However, the spread of the Delta variant, as well as supply chain problems on production have increased risks for the economic recovery.
