GDP at current prices stood at €10.2 billion in Q1 2026, the agency says.

Commenting on the results, Robert Müürsepp, national accounts service manager at Statistics Estonia, said the last time GDP growth ran above 2 percent came four years ago, in Q1 2022.

This was also the fourth quarter in a row when GDP rose on year, Müürsepp noted, with manufacturing, whose added value went up by 7 percent on the year, was the biggest driver.

"In the case of most economic activities, their contribution to GDP in the first quarter was positive, although mostly modest," added Müürsepp.

Administrative and support service activities also had a significant impact, with value added in this sector increasing by 11.6 percent. Other activities contributed less, though value added also rose in agriculture, forestry and fishing (at 10.2 percent), energy supply (by 5.5 percent), and arts, entertainment and recreation (5 percent). Among the more significant areas of activity, professional, scientific and technical activities, construction, and transportation and storage were also positive contributors.

Trade was among the negative contributors, with a slight decline (down by 0.8 percent). Information and communication had the largest negative impact on GDP, as value added fell by 10.9 percent here. Economic growth was also slowed by human health and social work activities, which went down by 4.8 percent. Value added also declined in accommodation and food service activities, which fell by 4.9 percent, as well as in mining and quarrying (down by 5.4 percent) and water supply and sewerage (down by 4.5 percent), though these activities exerted a limited impact on the economy in any case.

Value added overall increased in Q1 2026, while private consumption started to grow too.

In Q1 2026, value added grew by 1.5 percent. Value added represents the total output of enterprises after deducting the value of inputs used in production. It rose by 0.7 percent in the non-financial corporations sector, 2.2 percent in the financial corporations sector, 2.4 percent in the non-profit institutions sector, and 4.7 percent in the government sector.

Growth in Q1 2026 was broad-based, as value added rose in nearly all sectors except households, though rapid growth in intermediate consumption limited overall gains in value added, Statistics Estonia said.

Fastest growth in private consumption for nearly 4 years

Private consumption increased by 4.2 percent in the first quarter, marking its fastest growth since the second quarter of 2022. The largest rise was in household spending on transport, recreation, sport and culture. Expenditure also increased on financial and insurance services and other goods and services, while spending on alcoholic beverages, tobacco and food declined slightly.

The final consumption expenditure of the government sector increased by 4.8 percent, the agency said, influenced most by defense expenditure.

Net taxes on products accounted for almost half of GDP growth and were up by 9 percent in Q1 2026. Increased receipts of value added tax and customs and excise duties were seen too.

Investments and foreign trade showed modest growth

Despite strong economic growth in Q1 2026, investments fell by 13.3 percent to their lowest level since 2017. Declines were recorded in the non-financial corporations, financial corporations and households sectors, particularly in buildings, structures and dwellings. Foreign trade had only a limited impact, with exports rising by 0.6 percent and imports by 1.6 percent, mainly due to higher service exports and goods imports.

Foreign trade growth was driven by higher exports and imports of fabricated metal products and non-monetary gold, alongside increased transport, cultural and recreational services. Seasonally and working-day adjusted GDP rose by 1.1 percent quarter on quarter and 2.4 percent year on year.

Statistics Estonia compiled the above survey on behalf of the Ministry of Finance, with data as of May 29.

The agency says it will publish the results of the revision of national accounts for 2022–2025 on August 14 this year.

More detailed information is available from Statistics Estonia's website here and here.

Economist: Data showing economic cycle has turned a corner

The freshly released Statistics Estonia report shows economic growth has been almost double earlier estimates, Bigbank Chief Economist Raul Eamets noted.

"Whereas, according to the initial model-based estimates, Estonia's economy grew by 1.3 percent in the first quarter, the data released today show that the economy actually grew by 2.4 percent," Eamets said, commenting on the results. However, this was admittedly from a low base point. "It should immediately be added that this quite strong growth is also partly the result of a base effect, meaning that the first quarter of last year produced the weakest results of the past more than two years. It is easier to build growth from a low starting point."

Despite this rosier picture, Eamets urged caution going forward as well. "Looking ahead, three things are cause for concern. First, the economy returned to growth in the second quarter of last year, which means that the economy must now grow much faster than before if we want to continue seeing positive figures. The growth-supporting effect of a low base is no longer there," Eamets added.

"Second, the effects of the oil crisis have not yet been reflected in the first-quarter results. Higher fuel prices will eventually make their way into the statistics through increased transportation costs, and we can already see some signs of this in trade statistics. Third, the 13 percent decline in investment is worrying, because investment should form the foundation of future growth. Lower investment indicates caution and a wait-and-see attitude in the private sector. The negative confidence of both businesses and consumers regarding the future also points to slower growth ahead."

Meanwhile Luminor Chief Economist Lenno Uusküla noted the state budget deficit is scheduled to be larger than previously, while the government is investing more in the Estonian economy. "General government expenditure rose by 4.8 percent compared with a year earlier. Only investments declined, by more than a tenth, making a negative contribution," he said.

"The data now also show that the economic cycle has turned. Output has increased in most sectors of activity. Nevertheless, information and communications, healthcare, accommodation and food services, and several other sectors are still in decline," Uusküla went on.

Editor's note: This article was updated to include quotes from Raul Eamets and Lenno Uusküla.

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