In March the retail sales turned to downfall

According to Statistics Estonia, in March 2008 compared to March of the previous year the retail sales of goods of retail trade enterprises decreased 4% in constant prices. The growth of retail sales showed a slight increase in February but turned to downfall in March.

In March, the retail sales of goods of retail trade enterprises were 4.5 billion kroons. In grocery stores the retail sales of goods stayed at the same level compared with the March of the previous year. The retail sales in stores selling manufactured goods decreased by 8% compared with the same period of the previous year. Compared to March of the previous year, the retail sales decreased in most economic activities except mail order sale and retail sales of pharmaceutical goods and cosmetics. The retail sales of stores selling textiles, clothing and footwear and also of stores selling household goods and appliances, hardware and building materials decreased most.

Compared with the previous month, the retail sales in retail trade enterprises decreased 4% in constant prices according to seasonally adjusted data.

In March the revenues from sales of retail trade enterprises were 5.3 billion kroons, out of which retail sales of goods accounted for 85%. Compared to March 2007, the revenues from sales increased 3% in current prices. Compared to the previous month, this indicator increased 7%.

Retail trade enterprises’ retail sales volume index and its trend, January 2000 – March 2008 (corresponding month of the previous year =100)

Source: Statistics Estonia

Estonia Issuing Finnish Visas in Pskov, Minsk

Under an agreement on representation, Estonia will start issuing Finnish visas to local residents at its representations in the Russian regional capital Pskov and in Minsk, the capital of Belarus.

Starting from last month, Finland represents Estonia in the issuing of visas in ten countries, namely Indonesia, Namibia, Peru, the Philippines, Serbia, Syria, Thailand, Tanzania, Tunesia and the United Arab Emirates.

As of 1 January this year, Hungary represents Estonia in the issuing of Estonian visas in Moldova. Germany has agreed to represent Estonia in Angola, Banlgadesh, Bolivia, Cameroon, Cote d’Ivoire, the Dominican Republic, Ghana, Jamaica, Madagascar, Oman, Rwanda, Sri Lanka, Sudan, Trinidad and Tobago and Uganda.

Slovenia has promised to represent Estonia in Montenegro and Latvia in Azerbaijan, Uzbekistan and Kazakhstan.

Source: Estonian Review

Estonian citizens can travel to Colombia visa-free

Estonian citizens will be able to travel to Colombia without a visa starting from 1 May this year.
A unilateral decision to this effect was adopted by the Colombian government at the end of March, spokespeople for the Estonian Foreign Ministry said.

Estonians will be allowed to enter Colombia without a visa for the purpose of short-term travel or business.

Several other Central American and Caribbean island nations have already scrapped the visa requirement for Estonians. The countries of South America that have done so include Argentina, Chile, Ecuador, Paraguay, Uruguay and Venezuela.

Thanks to EU treaties, 30 countries of the EU and the European Economic Area do not require an entry visa from Estonian citizens.

In addition, 58 countries from across the globe are allowing visa-free entry to Estonian nationals.

Source: Estonian Review

A Baltic boom

By Eric Jansson, published at The Financial Times

For real estate developers who think big, central Tallinn has become a claustrophobic place. The property boom that energised the Baltic country after it joined the European Union in 2004 also made the centre of this city of 400,000 a more cramped place for developers to work.

Space was already scarce before the boom. Now it is scarcer. In a market where most developers prefer to start from scratch rather than renovating old buildings, strong demand for plots has sent the Estonian capital sprawling into the surrounding carrot and potato fields, where fledging suburbs now rise from the soil.

And still there is Kopli, an expansive district situated on a peninsula that points away from the Old Town into the chilly, choppy waters of the Gulf of Finland.

The area arguably represents the last great chance for real estate development near the city centre. Though it is blessed with open space like almost no other part of the capital, the district has seen little in the way of development, yet it lies minutes away from the heart of Tallinn by car, bus or tram.

“In 10 years, this will probably be one of the most valuable areas of Tallinn,” says Endel Siff, a businessman living in the city who has made much of his wealth in Russian oil transit.

To understand why a growing number of Estonian real estate experts think he is right after steering clear of Kopli for years, consider the district’s peculiar history of isolation. It spent a half century as a restricted zone during Estonia’s occupation by the Soviet Union, when the military deemed the peninsula’s port a top-secret asset.

When the country regained independence in 1991, Russian sailors quartered there stayed on for many more years. When they finally left, they stripped many of the war boats in the harbour of copper pipes to sell as scrap, causing them to capsize. They left behind an almighty mess in the water and on the land.

Yet much of what was built here under Soviet rule, residential and commercial property, remains usable and inhabited. Many of the buildings that predate 1940 have been preserved, perversely, because underinvestment has been so severe that, until recently, people somehow kept them in working shape even as they sagged and sank.

Read more: The Financial Times “A Baltic boom

In February the foreign trade deficit decreased

According to Statistics Estonia, in February 2008 compared to February a year ago the exports of goods increased and the imports remained on the same level. The trade deficit was the smallest during the previous two years.

In February 2008 the exports in current prices was 10.4 billion kroons and the imports was 13.2 billion kroons. Compared to February of the previous year, the value of exports rose 7% and imports remained on the same level. The trade deficit was 2.8 billion kroons. The trade deficit was smaller last in February 2006 — 2.6 billions kroons. Compared to February 2007, the trade deficit decreased by about 0.7 billion kroons.

In February 2008 the share of the EU countries was 73% and the share of CIS countries accounted for 12% of the total exports. The most important partners in exports were Finland, Sweden and Latvia. Exports of goods increased to all main countries of destination.

In total imports the share of the EU countries was 80% and that of CIS countries 12%. The most important partners in imports were Finland, Germany and Sweden. Imports from the EU countries increased nearly 0.6 billion kroons compared to February 2007. The biggest decrease was announced in the imports from Russia (0.9 billion kroons)

The foreign trade deficit with the EU countries decreased 0.5 billion kroons compared to February of the previous year. The foreign trade deficit with CIS countries decreased 0.9 billion kroons.

In both exports and imports the most important commodity section was machinery and equipment (the share 23% of exports and 21% of imports). Compared to February 2007, the nominal increase in exports was biggest in exports of raw materials and the products of chemical industry (31%), of agricultural products and food preparations (25%) and of machinery and equipment. The exports of mineral products decreased significantly — 0.7 billion kroons or 44%. The imports increased in the sections of raw materials and products of chemical industry and of machinery and equipment. The biggest decline in imports was in the section of mineral products and of wood and products thereof.

The surplus in the trade balance was mentioned as positive (active trade balance) in all commodity sections related to wood — wood and products thereof, miscellaneous manufactured articles (including furniture) and paper and articles thereof. The biggest foreign trade deficit was mentioned in the section of transport equipment, of raw materials and products of chemical industry and of mineral products.

Estonia’s foreign trade, January–February, 2007–2008 (million kroons)

Month Exports Imports Balance
2007 2008 Change % 2007 2008 Change % 2007 2008
January 9 693 10 032 3.5 13 861 13 333 -3.8 -4 168 -3 301
February 9 754 10 425 6.9 13 207 13 181 -0.2 -3 453 -2 756

Main foreign trade partners of Estonia, February 2008

Country of
destination,
group of countries
Exports,
mln kroons
Share, % Country of
consignment,
group of countries
Imports,
mln kroons
Share, %
TOTAL 10 425 100 TOTAL 13 181 100
EU 27 7 633 73 EU 27 10 546 80
CIS 1 294 12 CIS 1 590 12
1. Finland 1 802 17 1. Finland 1 916 15
2. Sweden 1 560 15 2. Germany 1 705 13
3. Latvia 1 109 11 3. Sweden 1 469 11
4. Russia 1 024 10 4. Latvia 1 132 9
5. Lithuania 619 6 5. Russia 1 120 8
6. Germany 556 5 6. Lithuania 842 6
7. Denmark 457 4 7. Poland 673 5
8. Norway 418 4 8. United Kingdom 489 4
9. United Kingdom 332 3 9. Netherlands 423 3
10. Canada 321 3 10. Italy 358 3

Exports and imports by commodity sections, February 2008

Commodity section
by Combined
Nomenclature (CN)
Exports Imports Balance,
mln kroons
mln kroons share, % change
compared
to same
month of
previous
year, %
mln kroons share, % change
compared
to same
month of
previous
year, %
TOTAL 10 425 100 7 13 181 100 0 -2 756
Agricultural products and food
preparations (I–IV)
920 9 25 1 323 10 5 -403
Mineral products (V) 927 9 -43 1 473 11 -24 -546
Raw materials and products of
chemical industry (VI)
463 4 31 1 085 8 20 -622
Articles of plastics and rubber (VII) 331 3 17 671 5 -2 -340
Wood and products thereof (IX) 1 019 10 1 440 3 -13 579
Paper and articles thereof (X) 338 3 11 264 2 5 74
Textiles and products thereof (XI) 558 5 9 787 6 5 -229
Metals and products thereof (XV) 1 112 11 6 1 545 12 6 -433
Machinery and equipment (XVI) 2 429 23 23 2 816 21 10 -387
Transport equipment (XVII) 863 8 16 1 680 13 -7 -817
Miscellaneous manufactured
articles (XX)
832 8 22 317 2 -5 515
Other 633 7 23 780 7 3 -147
Source: Statistics Estonia

A company develops Estonian version of YouTube

Estonian company TimeOut Solutions is developing a new application that is similar to YouTube.  Mart Luik, new CEO of TimeOut, said that the plan is to launch the solutions by the end of this year. He said it was too early to discuss the applications in detail, but said that they were going to be similar to YouTube.

According to Luik, the company plans to expand its activities to Central and Eastern Europe.

TimeOut Solutions belongs to Martinson Trigon, a venture capital company, that develops entertainment websites. The company’s owners include Estonian venture capitalist Allan Martinson, Joakim Helenius and Üllar Jaaksoo.

Source: BBN
Martinson Trigon

Tax cuts threaten to tear up the ruling coalition

The issue of whether to freeze the planned tax cuts could break up the ruling coalition of Reform Party, IRL and Social Democrats. Äripäev writes that although Prime Minister and the main advocate of tax cuts Andrus Ansip (Reform Party) claims that the idea of proposing to freeze the planned tax cuts is buried, Finance Minister Ivari Padar (Social Democrat) is determined to table the issue in the coalition.

Padar who decided not to raise the issue at the coalition meeting on Wednesday has promised to do so later this week. “I think we will start discussing the possible freezing on Thursday,” said the Finance Minister.

Ansip said in comment that the issue of freezing tax cuts has been artificially constructed by the media. “The Estonian export industry has finally started to grow and postponed of further tax cuts would affect jobs in the exporting sector. This is what we don’t want to do,” said PM.

Ivari Padar, Finance Minister, commented the situation saying that the government needs to cut costs in the amount of around EEK 7 billion in the next three years. “This is a lot and demands bold decisions. We have three options: (a) not to cut spending and end with a budget deficit, (b) freeze tax cuts and find funds to cover the budget deficit, (c) raise taxes while cutting spending and (d) cut spending.

When asked whether they are afraid of the future of the coalition, Ansip said that he does not see any threats to the coalition at present. Padar said that the objective is to keep the coalition intact, but it required compromises. Mart Laar from IRL said that he was confident that the coalition will remain in one piece. “But we need to find these billions that we don’t have in the budget revenues,” said the two-time PM.

Edgar Savisaar, chairman of Centre Party and main advocate of progressive income tax, told Äripäev that Padar’s proposal to freeze tax cuts is the first real statement made by him as as social democrat.

“I definitely support stopping the cutting of income tax rates. In today’s poor economic situation this is the only thing do to. Since the Reform Party has done a terrible job in leading this country and ended up with a budget deficit, they should swallow their pride and stop their main election promise,” said Savisaar.

Savisaar added, however, that he expects Padar to turn his coat under pressure from the Reform Party.

Source: BBN

Eesti Telekom Sees Increase in Profit

In the first three months of this year Eesti Telekom earned a net profit of 452 million kroons, 2.8 percent more year on year.  Eesti Telekom’s net profit per share was 3.27 kroons in Q1 2008.

Operating profit of the group increased by 2.8 percent to 436 million kroons in the first three months of this year, with the operating profit margin being 29.4 percent.

Before the depreciation of fixed assets the group’s operating profit totalled 576 million kroons, 6 percent more than in the same period last year. The margin of the operating profit before depreciation was 38.8 percent.

During the first quarter of 2008 TeliaSonera, the majority owner of Eesti Telekom, increased its holding in the company to 60 percent. 24 percent of shares in Eesti Telekom belong to the Estonian State.

Source: Estonian Review

Bronze Soldier cost Estonia EUR 450 million

A year after a furious row over the relocation of a Soviet war memorial in Tallinn, a government study says Estonia has lost Russian business worth an estimated EUR 450 million, or nearly 3 pct of its gross domestic product, International Herald Tribune writes.

The impact was especially strong at the Port of Tallinn, where state-of-the-art coal conveyers stretch between shiny silos and lofty cranes. The port lost 13 pct of its transit volumes last year as Russian cargo trains suddenly stopped crossing the Estonian border.
“Estonia has suffered greatly as a result of Russia’s actions,” said Nikolai Petrov, a foreign policy expert at the Carnegie Endowment for International Peace in Moscow. “Whenever you have two neighboring countries that are so completely asymmetric in terms of economic potential, the smaller is bound to suffer.”

Moscow never made it official policy to punish the Baltic country of 1.3 million residents. But Estonian officials suspected Russian involvement from the onset of the upheaval that ensued after Tallinn authorities on April 27 moved a Red Army monument and nearby war grave from the city center…

Read more: BBN

The growth of overdue loans slowed in March

Jana Kask, Head of the Financial Sector Policy Division of Eesti Pank

In March, the corporate and household loan and leasing stock increased by 2.6 billion kroons. The annual growth rate declined from 27% to 25%. The volume of loans added during the first three months of 2008 was 50% smaller year-on-year and remained also below the growth observed at the beginning of 2006. Next months should also witness more moderate loan growth. The financing of manufacturing companies has increased faster then the corporate sector average, though loan volume growth remained considerably more modest month-on-month.

The growth of overdue loans slowed in March. The share of loans overdue for over 60 days formed 0.93% of banks’ loan portfolio, which was just 0.03 pp more than last month. On an aggregate basis, positive developments could be observed in the quality of housing loans, where the volume of long overdue loans decreased by about 11%. However, the changes in the quality of hosing loans differed across banks. Although the quality of corporate loans and household consumer credit continued to deteriorate slightly in March, no loan segment has manifested loan servicing problems in the scope that might hinder the smooth economic adjustment or create problems in the financial sector.

The withdrawal of the impact of last year’s low comparison basis brought along a sharp decline in the annual growth of deposits, from the 14% a month ago to 10% at the end of March. Whereas the volume of corporate deposits decreased in March, no new trends could be seen in household deposits: the growth of time deposits and the decrease in demand deposits continued at a steady pace. The share of time, saving and investment deposits rose 1 pp in March, constituting 51% of household deposits by the end of March.

The profitability of banks has remained strong under the changed economic conditions. In the first quarter of 2008, the net profits of the banks registered in Estonia and of the branches of foreign banks operating in Estonia reached 981 million kroons. On an aggregate basis, the past four quarters’ average return on equity of banks exceeded 27%.

See the graphs at http://www.eestipank.info/pub/en/yldine/press/pressiteated/pt2008/pt0423.html

As from January 2008, Eesti Pank publishes a monthly statement on the most relevant financial sector indicators. The respective statistics and publication calendar are available on the web site of Eesti Pank at www.bankofestonia.info/pub/en/dokumendid/statistika/pangandusstatistika/tabelid/.

Source: Bank of Estonia

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