We have effectively bought ourselves economic growth via borrowed money. This has been a very large and expensive election pledge for the Reform Party—to abolish the so-called tax hump—while at the same time the budget is running a fairly substantial deficit. So is this actually a good thing now?

If we look at that growth, roughly half of it derived from tax revenues, including VAT, excise duties, and other taxes. Private consumption rose, which is positive, but we need to look at who was driving that consumption. Food consumption was still falling, while among the demographic that benefited most from the abolition of the tax hump—those earning above-average wages—the statistics clearly show increased spending on services and leisure activities.

So the headline figure looks good, but the substance is not quite as rosy?

Let's put it this way: there is substance behind it, but it is relatively thin. I am somewhat skeptical that it will carry us forward with strong momentum into the coming quarters.

The Strait of Hormuz crisis has not yet made its way into economic growth figures. Does that mean that 2.4 percent is the ceiling we have already seen and that we cannot move beyond it?

I think we can still hope to move forward, but this year it is more likely that growth will slow. The effects of the Strait of Hormuz are accelerating inflation. Companies may face additional cost pressures because producer prices tend to rise after the strait is closed. On the other hand, this means greater pressure on companies' cost bases, while consumers face higher prices, resulting in consumption volumes not increasing as quickly in the coming quarters.

Iran and the U.S. are playing a game of ping-pong. We do not know how long it will continue. At one moment they are exchanging fire; the next, they say that all agreements are nearly finalized. Trump announced that he would make a final decision today on extending the 60-day ceasefire, and oil prices began to fall. There is a possibility that the strait will be reopened. If that happens, could our economic growth remain at this level and continue moving upward?

Trump's statements should be treated with a certain degree of skepticism, because similar announcements have been made before.

But what if the strait were reopened today?

Even if the strait were reopened today, nothing would change overnight because critical natural gas infrastructure has been damaged. Those oil tankers will not suddenly appear on our doorstep. It takes time, and producer prices, for example, have already risen. Positive effects tend to spread through the economy more slowly than do negative effects.

According to figures published by Statistics Estonia on Friday, Estonia's GDP grew by 2.4 percent year on year to €10.2 billion in the first quarter of 2026, marking a fourth consecutive quarter of growth and the strongest expansion since the first quarter of 2022, driven primarily by a 7 percent increase in manufacturing value added.

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