Finance ministry: Economic recovery uneven across fields of activity

There are extensive disparities between various fields of activity behind the first quarter of 2021’s fast economic growth, Madis Aben, analyst at the fiscal policy department of the Estonian Ministry of Finance, said on Monday.

Data from Statistics Estonia shows the gross domestic product (GDP) grew by 5.4 percent year on year in the first quarter of 2021, the GDP at current prices was €6.9 billion.

“Behind Estonia’s fast economic growth in the first quarter are the relatively relaxed business activity and movement restrictions as opposed to other European Union countries, the good adaptability of the economy and the stabilizing activity of the government sector, especially through the healthcare sector,” Aben said in a statement.

However, he said that development has been uneven across the fields of activity of the private sector. “Economic situation indicators show fast improvement of confidence in industry and construction, while, according to surveys, consumers are still careful,” the analyst said.

Aben added that, in connection with the suspension of foreign tourism a year ago, all sectors serving tourists are still in a depressive state. As the share of these activities in the economy is small — accommodation and catering made up less than 2 percent of GDP in 2019 – Aben said this will not affect aggregate figures much.

“While in the economy as a whole, the salary fund in the first quarter was at the level it was at the beginning of last year, then in accommodation and catering, it was nearly 30 percent smaller. Together with art and entertainment, accommodation and catering are one of the few fields where the decline in income from employment at the beginning of the year worsened compared with the average of last year,” he said.

Read more: ERR.EE

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