Revised data show Estonia's recession was smaller than initially expected
Revised data published by Statistics Estonia last week show that last year's economic downturn was smaller than initially estimated. Analysts said the methodology is complex, flash estimates are not final, and recalculations are part of the process.
Estonia's economy contracted from the first quarter of 2022 until mid-2024, the new data shows. Although it was less steep than initial figures suggested.
Bigbank's chief economist Raul Eamets pointed out that the revised data differ significantly from the figures people are used to seeing in Statistics Estonia's live database.
"In current prices, that is, expressed in the prices of the given year, the value of GDP according to the revised data was €39,830,700,000, which is €370.6 million more than was initially calculated. That is not actually bad news," he said.
Eamets noted the 2023 data has been revised from the initially estimated 3.1 percent economic decline to 2.8 percent decline. Instead of a 0.3 percent decline for 2024, the corrected figure is 0.1 percent.
At the same time, Eamets observed that in a small economy, a few large transactions can significantly affect quarterly GDP.
"For example, until now we lived with the understanding that in the last quarter of last year the economy grew 0.6 percent, but according to the revised data it actually fell -0.5 percent, with slight growth occurring in earlier quarters," he said.
Eamets highlighted that since the methodology for calculating GDP is very complex and is carried out using several approaches, recalculations and adjustments are a normal part of the process everywhere, not only in Estonia.
Swedbank's Chief Economist Tõnu Mertsina said Estonia's economic downturn lasted until the middle of 2024, rather than ending in 2023.
When these figures are compared with the previously published flash estimates for the first and second quarters of this year, no growth can be seen, he added.
"For 2025, the numbers have to be derived, which in reality cannot be done. It is possible to derive them, but since the 2024 quarters changed so much, the previously published GDP growth rates do not fit with them anymore," the economist wrote on social media.
He pointed out that the same was true last year, and it does not make sense to publish a partial time series that raises questions, at least until the release of the next set of more precise data.
Last month, Statistics Estonia admitted the mistake and said it was developing a new methodology.
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Editor: Barbara Oja, Helen Wright
