31.08.202605:21:12UTC+00Estonian Q2 GDP Annual Growth Slows to 1.8%

Estonia’s economy grew by 1.8% year-on-year in Q2 2026, a marked slowdown from the upwardly revised 2.9% expansion recorded in Q1. The loss of momentum was mainly driven by weaker domestic demand: household consumption growth dropped to 1.6% from 3.8% in the previous quarter, while government spending growth fell sharply to 0.5% from 4.5%.

External trade provided mixed signals. Exports of goods and services picked up, rising 2.7% compared with 1.3% in Q1, but imports grew even faster, accelerating to 4.3% from 1.1%. Gross fixed capital formation continued to contract, though at a slower rate, shrinking 6.1% after a 10.6% decline in Q1.

From a production perspective, the main positive contributions came from manufacturing, which expanded by 6.5%. Agriculture, forestry, and fishing surged by 168%, largely reflecting a low base in the same period a year earlier, while the construction sector also performed strongly, growing by 7.5%.

On a seasonally adjusted quarter-on-quarter basis, GDP increased by 0.3%, easing from a downwardly revised 1.0% rise in Q1.