OREANDA-NEWS. November 18, 2011. This year, Estonia's economic growth has been considerably faster than the average of euro-area countries. According to the preliminary estimate of Statistics Estonia, our GDP increased 7.9% in the third quarter, year-on-year, and 0.8% compared to the second quarter. Although growth peaked in the first half of the year, the third-quarter increase was nevertheless remarkable, reported the press-centre of Eesti Pank.

The rapid growth was driven by an increase in foreign and domestic demand. However, since confidence is declining, domestic demand is to brake, though it may still support growth in the very near future. The slowdown in private-sector expenditure growth is partly offset by an increase in the general government investment activity.

Developments in the technology sector made it possible for Estonia to achieve higher growth indicators on account of more efficient use of production capacity. The manufacturing sector grew owing to Estonia's strong connection to countries enjoying faster-than-average GDP growth.

A slowdown in the business cycle indicators in many countries shows that global growth has decelerated markedly in recent months. Several international organisations have lowered outlooks on the general economic environment. The decline in confidence did not have an effect on the third-quarter indicators. Only manufacturing and exports hinted at a more abrupt growth slowdown. The steepiIndustrial growth decline at the end of the third quarter will have a stronger effect on the fourth-quarter growth.

Estonia's economic growth will slow markedly due to the deterioration in the external environment.