PRELIMINARY GDP DATA: Q1 ECONOMY EXPANDED BY 1.2%

Estonia's Q1 GDP Grows by 1.2% Year-on-Year (Flash Estimate)

According to Statistics Estonia's preliminary estimate, Estonia's first-quarter gross domestic product (GDP) increased by 1.2 percent compared to the same period in 2024.

Robert Müürsepp, head of the national accounts team at Statistics Estonia, stated that the improvement in the Estonian economy continued in the first quarter of 2025.

Compared to the first quarter of 2024, GDP increased by 1.2 percent, and compared to the fourth quarter of 2024, the seasonally and working-day adjusted GDP rose by 0.1 percent.

Statistics Estonia will publish the official GDP data for the first quarter of 2025 on May 30th.

The flash GDP estimate is compiled by Statistics Estonia using statistical models and is not methodologically comparable to the official GDP time series.

Economist: Other Indicators Also Point to Economic Recovery

Raul Eamets, chief economist at Bigbank, said that Statistics Estonia's flash estimate instills optimism.

"The economy already turned to growth in the last quarter of last year when we saw a similar 1.1 percent annual growth. The economic recovery is also supported by other indicators. For example, the recently published retail trade figures for March showed a two percent increase. Exports have started to grow, and industrial production figures in February showed growth. The number of unemployed has also decreased," Eamets listed.

Lenno Uusküla, chief economist at Luminor, noted that it would be more accurate to say that the economy is no longer declining.

"Economic growth remains weak, barely visible. It's not entirely absent, but whether the economic growth is noticeable depends on which side of the post you're looking from," Uusküla said.

"The worst is currently over. The economy is no longer falling. But it is not rising significantly either," Uusküla added. "In the first quarter of this year, GDP remained practically at the same level as in the fourth quarter of last year, increasing by only 0.1 percent."

"The growth of 0.7 percent in the last quarter of last year is average growth for the Estonian economy, but considering the hole we are coming out of, it remained weak. Unfortunately, this growth was also not due to a substantial economic recovery, but rather the accelerated purchase of cars and the reduction of car inventories, which directly positively affects economic growth," the economist said.

According to Uusküla, the economic growth outlook for this year is full of uncertainties. "Trump's tariff lottery has put the prospects of many exporters in a bleak state. The end of the war in Ukraine is awaited, but it is not clear whether its conditions will be favorable for us," he said.

"At the same time, however, the potential of the Estonian economy remains good. There are plenty of smart people and enterprising companies. The state is increasing defense spending, which will partially reach domestic demand," Uusküla concluded.