Estonian Growth Slows In Second Quarter

Aug. 15, 2007
Rate is 7.3%, but slower than 9.8% in 2006

Estonia's breakneck economic growth rate dipped in the second quarter, but remained a robust 7.3% compared with the same period in 2006, the state's statistics office said Aug. 24.

"The economy continued growing fast but decelerated at constant prices primarily due to the slowdown in the value-added growth in manufacturing, wholesale and transport as well as in storage," the national statistics office said.

In the first quarter of this year, GDP had grown by 9.8% compared with the same period of 2006. Over the whole of 2006, Estonia's GDP had grown by 11.4% on an annual comparison.

Like neighboring Latvia, which also broke free from the Soviet Union in 1991 and joined the EU in 2004, Estonia has experienced spiraling growth as its economy catches up with older members of the EU. Both countries have also had problems keeping inflation under control, sparking warnings of overheating, which are particularly acute in Latvia.

Estonia's growth rate last year was the second fastest in the then 25-member EU, lagging just half a percentage point behind Latvia, where the 11.9% annual GDP growth seen last year was also fueled by strong domestic demand. Latvia's GDP grew by 10.7% in the first quarter of this year on an annual comparison, according to that country's statistics office.

Copyright Agence France-Presse, 2007

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