Estonia's second-quarter growth shows quick exit from recession

Aug 11, 2010, 9:19 GMT

Tallinn - Estonia's economy returned to growth in the second quarter of 2010 after nine successive quarterly contractions, preliminary figures released Wednesday said.

According to Statistics Estonia, gross domestic product (GDP) grew 3.5 per cent from April to June compared to the same period last year, putting Estonia behind only Sweden among European Union members in its growth rate.

The data signal that Estonia is rapidly emerging from one of the EU's deepest economic recessions. In 2009 the economy contracted by 14 per cent.

Growth in the second quarter, following a 2-per-cent contraction in the first quarter, was 'above all influenced by the growth of value added of the industrial sector,' said Statistcs Estonia.

Seasonally and working-day adjusted GDP increased 2.0 per cent in the second quarter compared to the first quarter of the year.

Estonia is due to become the first former Soviet republic to join the eurozone on January 1, 2011.

Its public debt and deficit levels have consistently been lower than those of current eurozone states over the last five years.

Tough austerity measures taken by the government of Prime Minister Andrus Ansip kept the country's euro adoption plans back on track after a property and credit bubble burst in 2007.

The European Central Bank and European Commission have approved Estonia's bid and prices are already being displayed in euros across Estonia ahead of the January 1 currency switch.