Economy grew 1.8 percent in second quarter

The economy grew 1.8 percent in the second quarter of 2026 compared with the same period a year earlier, ERR reported, citing the Statistics Office.

Robert Müürsepp, head of the Statistics Office’s national accounts service, said two-thirds of economic activities contributed positively to growth.

Manufacturing made the largest contribution, with value added increasing 6.5 percent. Agriculture, forestry and fishing followed, with value added rising 168 percent because of an exceptionally low comparison base last year. Construction grew by 7.5 percent.

Value added also increased in mining, by 15.5 percent; water supply, sewerage, waste management and remediation, by 14.3 percent; and other service activities, by 12.3 percent. Their contribution to overall growth remained limited because they are smaller sectors.

The biggest negative effects came from real estate activities, where value added fell 3.6 percent; wholesale and retail trade, which declined 3.2 percent; and electricity, gas, steam and air conditioning supply, which fell 9.6 percent.

Tax revenue increased by 1.8 percent, matching the growth in gross domestic product. Müürsepp said tax revenue had last had such a small effect on economic growth in the first quarter of 2025.

Private consumption grew slightly more slowly than the economy, increasing 1.6 percent. Household spending rose most on recreation and culture, as well as on other goods and services, household furnishings, information and communication, and healthcare.

Spending on tobacco and alcohol fell the most. Expenditure on clothing and footwear, food, and non-alcoholic beverages decreased slightly.

Government final consumption growth slowed to 0.5 percent, while final consumption by the non-profit sector fell 0.1 percent.

Investment slowed as foreign trade recovered

Investment slowed for the second consecutive quarter. The biggest effect came from households, whose investment in dwellings fell 22.2 percent. Investment by non-financial corporations declined 12.5 percent.

Non-financial companies reduced investment in other buildings and structures, as well as in transport equipment. Government investment increased by 15 percent.

Although investment in other machinery and equipment declined, investment in buildings and structures was twice as high as in the second quarter of last year, Müürsepp said.

Foreign trade began to recover in the second quarter, with exports rising 2.7 percent and imports increasing 4.3 percent. Net exports were negative for the first time since the fourth quarter of 2024, meaning that goods and services worth 70 million euros more were bought than sold abroad.

Goods exports increased 4.2 percent and imports 6.9 percent, mainly because of electricity trading. Services exports rose 0.8 percent, while services imports fell 1 percent. Exports of cultural and entertainment services and other business services increased, while transport and communication services were the main factors behind the decline in services imports.