PM: priority of state budget next year is education

When presenting the state budget to the Riigikogu, Prime Minister Andrus Ansip said that the indisputable priority for next year will be education. He stated that pensioners and young families can also feel at ease and secure, as the increase in pensions and the payment of the parental benefit will continue. The obligations of Estonia to increase its defence expenditures will also be fulfilled.
According to Prime Minister Ansip, the growth of investments into education is one of the fastest in the budget for 2009. “Our wealth does not lie in great masses or beneath the ground, our wealth lies in our brains,” said Ansip, according to whom there must be close co-operation between state authorities, scientific institutions, and entrepreneurs. Young families can be at ease, as the payment of the parental benefit will continue as before. “Every new citizen of the world is very much awaited in our country,” said the head of the government when speaking to the members of the Riigikogu. Pensioners also do not need to worry. This year, the state will pay more for pensions than is received from the social tax. “It involves a large amount of additional funds for which painful cuts had to be made, but I still do not doubt the correctness of this choice,” said Ansip.
Next year, Estonia will spend 1.9 per cent of GDP on national defence, which, according to the Prime Minister, is a significant message both domestically and outside Estonia. “The increase in the defensive capacity of the Estonian state and co-operation with NATO allies is one of the priorities of this government,” said Ansip.
“The government managed to keep the budget in balance without using the reserves or increasing taxes,” said Prime Minister Andrus Ansip. According to him, the freezing of the wages of higher public officials, a decrease in operating expenses, and the number of state officials are some of the first examples of the cutting of expenses, which the government wishes to implement next year.
“The most painful decision of the budget negotiations was definitely the stopping of the income tax reform for one year,” said Prime Minister Ansip. According to Ansip, in Estonia the labour force is still extremely highly taxed, which curbs our competitiveness and decreases the motivation of working people to try harder. “I do not doubt for a second that we must decisively work towards lowering the income tax from 26 per cent down to 18 per cent,” said Ansip.

Source: Estonian Review

In July exports grew by one tenth

According to Statistics Estonia, in July of this year the value of exports of goods at current prices amounted to 11.1 billion kroons which was 12% more than in July of the previous year. The July indicator of the growth rate of exports was one of the largest this year, remaining only behind the 18 per cent growth rate of exports reported in April.

Compared to July of the previous year, the nominal exports of goods increased 1.2 billion kroons and this was mainly due to the increase in the exports of fertilizers and electrical equipment.

The value of goods imported to Estonia in July was 15.1 billion kroons, it was 9% more than in July of the previous year. Increase in the imports of fuels by 1.1 billion kroons was the factor which gave rise to a significant increase in imports.

The foreign trade deficit was 4 billion kroons or nearly the same as in July of the previous year. At the same time, as the growth rate of exports has exceeded the growth rate of imports in every month of this year, the trend has brought along improvement in the foreign trade deficit.

Estonian foreign trade, January–July, 2007–2008

Month	Exports, mEEK			Imports, mEEK			Balance mEEK
	2007	2008	%	2007	2008	%	2007	2008
January	9 693	10 111	4	13 861	13 596	-2	-4 168	-3 485
February	9 754	10 525	8	13 207	13 629	3	-3 453	-3 104
March	10 439	10 736	3	15 407	14 133	-8	-4 968	-3 397
April	10 387	12 281	18	15 580	15 864	2	-5 193	-3 583
May	11 692	11 571	-1	16 040	14 423	-10	-4 348	-2 852
June	10 743	10 753	0	14 943	14 285	-4	-4 200	-3 532
July	9 883	11 091	12	13 950	15 138	9	-4 067	-4 047

In July the share of the EU countries was 69% and the share of the CIS countries accounted for 16% of the total exports (in July of the previous year 68% and 11%, respectively). Compared to July of the previous year, exports of goods to the EU countries increased by 0.9 billion kroons (13%), and exports to the CIS countries by 0.6 billion kroons (59%). The main countries of destination were Finland, Russia and Sweden. The biggest increase — by 0.6 billion kroons — was announced in the exports of goods to Russia. Exports to Finland and to the United States of America increased, too.

In total imports of goods, the share of the EU countries was 81% and that of the CIS countries 11% (in July of the previous year 78% and 12%, respectively). Imports from the EU countries increased by 1.4 billion kroons or 13% compared to July of the previous year. At the same time, imports from the CIS countries decreased a little. Main countries of consignment were Finland, Germany and Lithuania. Imports of goods from Russia decreased significantly — by half a billion kroons. But imports of goods from Lithuania increased by 0.7 billion kroons. Besides, a twofold increase in the imports from Belorussia (from 0.3 billion kroons to 0.6 billion kroons) was also of great importance.

In both exports and imports, the most important commodity section in July was machinery and equipment which accounted for one fifth of both flows. Exports of chemical products increased nearly twofold — from half a billion kroons to one billion kroons. Exports of machinery and equipment and metals and products thereof grew by one third (by 0.6 and 0.3 billion kroons, respectively). Exports of mineral fuels decreased by 0.3 billion kroons, this denotes a decrease in re-exports.

In the imports of goods, an essential growth was observed in the commodity section of fuels (by 1.1 billion kroons). At the same time, the imports of transport equipment decreased 0.4 billion kroons.

Main foreign trade partners of Estonia, July 2008

Country of destination, group of countries	Exports, mEEK	Share, %	Change compared prev. year, %	Country of consignment, group of countries	Imports, mEEK	Share, %	Change compared prev. year, %
TOTAL	11 091	100	12	TOTAL	15 138	100	9
EU27	7 607	69	13	EU27	12 303	81	13
CIS	1 727	16	59	CIS	1 638	11	-2
1. Finland	1 946	18	17	1. Finland	2 102	14	2
2. Russia	1 360	12	72	2. Germany	2 086	14	11
3. Sweden	1 282	12	17	3. Lithuania	1 721	11	63
4. Latvia	1 176	11	-7	4. Latvia	1 359	9	33
5. United States	704	6	67	5. Sweden	1 317	9	3
6. Lithuania	643	6	4	6. Poland	782	5	28
7. Germany	531	5	15	7. Russia	773	5	-39
8. Denmark	402	4	91	8. Belarus	590	4	127
9. United Kingdom	292	3	11	9. Netherlands	503	3	5
10. Norway	270	2	-17	10. United Kingdom	435	3	-7

Exports and imports of goods by commodity sections, July 2008

Commodity section by Combined Nomenclature (CN)	Exports			Imports			Balance, mEEK
	mEEK	share, %	change compared prev. year, %	mEEK	share, %	change compared prev. year, %
TOTAL	11 091	100	12	15 138	100	9	-4 047
Agricultural products and food preparations (I-IV)	998	9	22	1 522	10	14	-526
Mineral products (V)	1 174	11	-20	2 883	19	61	-1 709
Raw materials and products of chemical industry (VI)	987	9	116	1 152	8	31	-165
Articles of plastics and rubber (VII)	338	3	8	782	5	6	-443
Wood and products thereof (IX)	838	8	-14	354	2	-33	484
Paper and articles thereof (X)	340	3	3	296	2	3	44
Textiles and products thereof (XI)	381	3	4	688	5	11	-307
Metals and products thereof (XV)	1 351	12	30	1 813	12	17	-462
Machinery and equipment (XVI)	2 544	23	32	2 992	20	-3	-448
Transport equipment (XVII)	863	8	-8	1 563	10	-21	-700
Miscellaneous manufactured articles (XX)	616	5	-17	320	2	-5	296
Other	661	6	33	773	5	-5	-111

 Source: Statistics Estonia