TALLINN, DEC 9 (Reuters) - Estonia's gross domestic product fell a revised 3.5 percent year-on-year in the third quarter of 2008 as domestic demand dived by an annual 9.5 percent, the statistics office said on Tuesday.
The downturn follows several years of strong growth and is the sharpest in 14 years when it was -5.4 percent in the third quarter of 1994.
Previously, the office said in a flash estimate the economy contracted 3.3 percent in the third quarter.
Estonia entered recession from the second quarter of this year after two quarters of economic contraction. The office said that in the third quarter compared to the second the economy slowed by 0.9 percent.
"GDP was significantly influenced by the weak domestic demand, which decreased by 9.5 percent. The decrease in the main components of domestic demand, private consumption expenditures and capital investments, accelerated to -3.5 percent and -6 percent, respectively," the office said in a statement.
However, the office added that exports of goods and services increased in the third quarter of 2008.
"The increase was mainly influenced by exports of goods which grew 8.9 percent in real terms, exports of services increased only 0.6 percent," it said.
Estonia's economy expanded rapidly in recent years due to surging consumer demand, fed by easy credit from Nordic banks.
The lines of credit have now dried up as the global credit crunch hit. (Reporting by David Mardiste, editing by Mike Peacock)