Statistics Estonia adjusts down severity of Estonia's recession
During a revision, Statistics Estonia adjusted economic indicators for the past four years, revealing that the economic downturn was not as severe as previous GDP data had indicated.
Robert Müürsepp, head of national accounts at Statistics Estonia, told ERR that in balancing data for the past four years, the agency refined its estimates of price effects during the period of rapid inflation.
"As a result, the figures for 2022 improved, with the previous estimate of a 1.2 percent economic contraction replaced by 0.7 percent growth," Müürsepp said.
The revisions for 2023 and 2024 were relatively modest overall. Economic growth for 2025 was revised upward from 0.7 percent to 1.3 percent.
"For the most recent years, the impact of tax changes was refined, resulting in a smaller positive contribution from taxes to GDP. At the same time, estimates of value added in the business sector improved," Müürsepp explained.
Rasmus Kattai, head of the monetary policy and economic research department at the Bank of Estonia, wrote on social media that the new figures confirm what a broader range of data had already suggested: The economy has not exactly had an easy time, but the downturn was not as severe as GDP statistics had previously indicated. Since the energy crisis — in other words, since 2024 — the economy has been on an upward trajectory.
"It is standard practice for GDP statistics to be revised and corrected retroactively. In any case, it is good that the overall statistical picture across many different indicators has now become more consistent," Kattai said.
Luminor chief economist Lenno Uusküla said it was to be expected that earlier estimates of economic growth in 2022-2023 would be lower than current estimates.
"The largest difference in annual growth was in the first quarter of 2022 when the previous estimate was 2.2 percent, compared with the current 4.6 percent," Uusküla said.
He described the revision for the first half of 2025 as a significant upward adjustment, with year-on-year growth for that period raised by 1 percentage point.
"Adjustments of this magnitude are significant, although not entirely unprecedented for Estonia during periods of major change," Uusküla added.
According to Müürsepp, Statistics Estonia conducts a revision every year to refine its estimates for the previous four years. He said the revisions are prompted by new data sources and more detailed calculations based on supply and use tables.
Finance Minister Jürgen Ligi said in a social media post that the revised statistics show that Estonia has once again underestimated its economy.
"At a time when people have once again begun claiming — and the opposition, the then Estonian Institute of Economic Research and Bigbank have begun lecturing us — that the party and the government run the economy /.../, it would have been good to know and point out that there had been an annual improvement of 3.1 percent," Ligi said.
He added that errors in estimates are made entirely independently of the government, but that the government has helped Statistics Estonia improve the quality of its work, including through funding.
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Editor: Kain Koppel, Marcus Turovski
