Estonia takes EEK 6.5 bln loan

Today the government decided to take up to EEK 6.493 bln loan for up to 15 years to finance state budget expenditures and financing transactions, aripaev.ee writes. 

The Ministry of Finance is in talks with Swedbank and European Investment Bank to get the loan. They plan to borrow EEK 2.346 bln from Swedbank, with deadline up to 2 years.

The Ministry of Financed filed a loan application for European Investment Bank to get an EEK 8.606 bln loan. The Minister of Finance will sing a framework contract after the loan application has been satisfied.

Read more:  BBN

PM has mounted record tax burden

The PM Andrus Ansip has directed Estonia to last decade’s greatest tax burden before the government will meet today or in the future to discuss tax increases and new taxes, Äripäev reports.

“Fridays tax-free” the tax collector promises in Reform Party’s election campaign and gives taxpayer back his piggy and pants. Couple of years later the same voter has to waive his piggy, but tax collection is on his way to get the pants as well.

Ansip sent Äripäev a throughout commentary of keeping the budget balance, but he ignored questions regarding his earlier promise to lower tax burden.

Several politicians and public figures consider tax increase to be inevitable. The government which promised to lower tax burden has become the government that brings record taxes.

“If there are people who take all campaign promises as gold, it’s more their than policians’ problem. Politicians’ goal is to be elected,” Raul Eamets, the economy professor at the University of Tartu said.

Last year the government increased excise duties to cover the loss that came from lowering the income tax. Currently Ivari Padar, the Minister of Finance gives new proposals to increase taxes.

“Voters can never be sure of anything if politicians are near,” Mart Laar, the chairperson of Pro Patria and Res Publica Union said.

Reform Party’s supporters and members who are entrepreneurs are disappointed in the higher tax burden and don’t believe that costs are cut.

Read more here: BBN

Industrial production decreased by a third

According to Statistics Estonia, in March 2009 compared to March of the previous year, the production of industrial enterprises decreased 30%.

The rapid decrease in industrial production, which had begun in the end of the previous year, continued in March. When in October-November 2008 the decrease in production was around 15% compared to the respective month of the previous year, then in December production decreased 22%, in January of this year 27%, and in February and March 30%.

There were no significant changes in manufacturing during March. The production in manufacturing fell 33% compared to the same month of the previous year, this carried the production back to the level of 2003. The main reason causing the decline in production was the insufficient demand both in domestic and external markets, whereas the sales fell equally 27% in both domestic and external markets. Production decreased in all branches of manufacturing in March. Decline in the branch holding the largest share, i.e. the production of food products, which is predominantly oriented to the internal market consumption, was 13%. Decline in the production of food products was one of the smallest of all branches of manufacturing also in March. Production in the manufacture of computer, electronic and optical products, which is predominantly oriented to the external market, decreased 13%, too. Production in the manufacture of metal products decreased by one fourth. A nearly 35% continuous decline was reported in the production of wood, where the production of sawn timber and all wood products dropped. The biggest fall in March was in the production of chemical products. As a result of the price drop in the world market, the production of basic chemicals was stopped. About 40% less paints and varnishes and 46% less caulking compounds were produced than at the same time a year ago.

Of all industries, production grew only in energy. In March compared to March of the previous year, the production of electricity increased 18%, primarily due to the export of electricity to Finland and Latvia. The production of heat decreased 6%.

In March compared to February, industrial production decreased 3% according to the seasonally adjusted data.

The volume index and trend of production in manufacturing, January 2000 – March 2009
(2005 = 100)

Change in volume index of industrial production, March 2009
(percentages)

Economic activity *change Change compared
to corresponding
month of previous year
according to
unadjusted data
according to
working-day
adjusted datab
TOTAL -2.8 -25.7 -29.7
Energy production 2.0 7.3 7.3
Mining -6.8 -8.3 -12.4
Manufacturing -3.0 -28.6 -32.7
manufacture of food products -2.6 -9.7 -12.6
manufacture of wood and wood products -3.6 -31.6 -35.4
man. of fabricated metal products 4.9 -19.0 -25.1
man. of computer, electronic products -6.3 -9.8 -13.0
manufacture of electrical equipment -6.7 -30.4 -35.3
man. of chemicals and chemical products -41.5 -60.7 -63.3
manufacture of furniture 1.6 -16.4 -21.7
repair of machinery and equipment -25.1 -40.8 -43.5
manufacture of building materials 13.5 -55.0 -57.0
manufacture of textiles -4.0 -22.8 -27.9

*first row  - Change compared
to previous month
according to
seasonally adjusted dataa
In case of the seasonally adjusted volume index, the impact of the differing numbers of working days in a month and seasonally recurring factors has been eliminated. It is calculated only in comparison with the previous month

 

a

b In case of the working-day adjusted volume index, the impact of the differing number of working days in a month has been eliminated. It is calculated only in comparison with the corresponding month of the previous year.

Source: Statistics Estonia

Decrease in retail sales slowed down a bit

According to Statistics Estonia, in March 2009 compared to March of the previous year the retail sales of goods of retail trade enterprises decreased 13% at constant prices. In March, the decrease in retail sales slowed down a bit and was 5 percentage points smaller than the annual decrease of February.

In March, the retail sales of goods of retail trade enterprises were 4.6 billion kroons. The decrease in the retail sales of goods was most influenced by the stores selling manufactured goods, where the retail sales decreased 18% compared to the same period of the previous year. Compared to March of the previous year, the retail sales of goods decreased in most economic activities. The retail sales of other specialized stores, such as stores selling computers and their accessories, photography supplies, sports equipment, books, games and toys, etc., decreased most or 29%. Compared to previous months, the annual decrease in retail sales of the stores selling household goods and appliances, hardware and building materials slowed down substantially. In these stores the retail sales decreased 19% during the year. The retail sales in stores selling textiles, clothing, footwear and leather goods decreased by one tenth in comparison with the same period a year ago. This was one of the smallest decreases over the last six months.

Retail sales in grocery stores decreased 8% compared to March of the previous year. Consumers are continuously hesitant about the future and restrict their expenditure on food ever more due to that.

Compared to the previous month, the retail sales of goods in retail trade enterprises decreased by one per cent at constant prices according to the seasonally and working-day adjusted data.

In March, the revenues from sales of retail trade enterprises were 5.5 billion kroons, out of which retail sales of goods accounted for 85%. Compared to March of the previous year, the revenues from sales decreased 16% at current prices.

Retail sales volume index of retail trade enterprises and its trend, January 2002 — March 2009
(corresponding month of previous year = 100)

Source: Statistics Estonia

Rating for Estonia unchanged

The international rating agency Moody’s Investors Service today lowered the credit ratings of Latvia and Lithuania but left the Estonian rating unchanged.
Moody’s confirmed the foreign and local currency ratings of the government of Estonia at A1. The long-term foreign currency bank deposit ceiling was also confirmed at A1. The outlook for these ratings was changed to negative.
The upper limit of foreign currency obligations rating for companies operating in Estonia is Aa1 with a stable outlook.
Moody’s has concluded that the Estonian government’s creditworthiness is likely to remain resilient in the face of a deep and potentially prolonged recession.
The government is working to keep the budget deficit under control, liquidity is secure, and the government is relatively well isolated from problems in the banking sector, the agency said in its information.
Disciplined fiscal policy during the boom years, plus an impressive fiscal adjustment in reaction to the current circumstances, means that the budget deficit is likely to remain within the 3% of GDP Maastricht threshold in 2009.
This performance — one of the best in the EU — should permit Estonia to exercise its “exit strategy” and officially adopt the euro in January 2011, Moody’s said. Moody’s views entry into the Euro-zone as positive for Estonia’s creditworthiness.
The negative outlook for the Estonian government’s ratings reflects the high degree of uncertainty for the Estonian and regional economic outlook.
Moody’s believes that the Estonian economy is unlikely to stabilise without some support from external demand.

Source: Estonian Review, BNS

Best Estonian nature photo

Jarek Jõepera's photo received the Grand Prix

Jarek Jõepera's photo received the Grand Prix

The other photos you can see here

Furniture producers join sales force

Estonian furniture manufacturers join their forces to establish an Estonian furnishings department store to Stockholm and Helsinki, Eesti Päevaleht reports.

By this autumn curtain producer Sunorek and sofa producer Berg will create a group of furniture manufacturers. In that group are Aet Piel’s design plc, lamp creator Tõnis Vellama and Tank Indoor Systems, Finnish furniture modules manufacturer.

“We consider whether to start joint sales in Nordic countries through internet and open a bureau in Helsinki. It’s worth enter the market carefully with new conception. If we succeed, it’s worth considering open a salon in size in 200 sq m,” Indrek Pals, the CEO of Sunorek said.

Estonians want to offer new selection of goods besides big furnishing department stores which are common in Nordic countries. Sunorek has been operating on Finnish market for a long time. The companies plan to come out with common name and action plans at interior fare “Habitare” in Helsinki this autumn.

“According to my vision we should concentrate Estonian designers and producers to sell Estonian production in Finland and Helsinki,” Mart Jõhvikas, the CEO of Borg said.

Big furniture producers said that entering Nordic market is the only right decision.

“It’s worth going to Finland and Sweden, because their economy decreased times less than in Estonia. If they get their foot in the door, they may sell some of our sets as well,” Enn Veskimägi, the CEO of Standard said.

The companies don’t plan to merge.

Source: BBN

Sales of equipment dropped

According to Statistics Estonia, in February exports of goods from Estonia at current prices totalled 7.9 billion kroons and imports to Estonia 8.9 billion kroons. Compared to February of the previous year, exports declined by 26% and imports by 35%. The decrease was caused by a significant decline in the trade concerning machinery and equipment and transport equipment.

In February, machinery and equipment held the first place in the exports and imports of goods accounting for nearly a fifth of both flows. Compared to February of the last year, the exports of machinery and equipment decreased by 0.6 billion kroons or by one fourth, and imports by 1.2 billion kroons or 41%. The exports of transport equipment decreased by 0.5 billion kroons or 54% and imports by 1.3 billion kroons or 74%. By value, a decrease was detected in all commodity sections, excluding mineral products in case of which both exports and imports increased a little.

Foreign trade deficit was the smallest of last months or 1.1 billion kroons. In the trade with main partner countries, the largest surpluses were registered in the trade with Finland and Sweden and the largest deficits — with Germany and Lithuania.

The main countries of destination were Finland (18% of Estonia’s total exports), Sweden, Russia and Latvia. At the same time, exports to these countries decreased the most in February. Increase in exports was registered only to Canada and Nigeria due to the increase in exports of fuels. By value, the main commodities exported in February to Finland, Sweden and Russia were machinery and equipment and, to Latvia — mineral products (incl. electric energy and fuels).

The main countries of consignment were Finland (13% of Estonia’s total imports), Russia, Germany and Latvia. The largest declines in imports were recorded from Germany and Finland, this was mainly caused by the decline in the imports of transport equipment and machinery and equipment. Mostly mineral products (incl. fuels and natural gas) were imported from Latvia and Russia.

The decline in foreign trade has been caused by the decrease in demand in the internal markets as well as in the main partner markets. According to Eurostat, a decline was announced in January in both exports and imports of all Member States.

Preliminary foreign trade data about February were released by Statistics Estonia on 9 April (on 40th day after the end of reference period). This news release provides the revised data and offers a more detailed overview of trade about the month under observation.

Main foreign trade partners of Estonia, February 2009

Country of

destination,
group of
countries

Exports,
million
kroons
Share,
%
*,
%
Country of

consignment,
group of
countries

Imports,
million
kroons
Share,
%
*,
%
Total 7 864 100 -26 Total 8 948 100 -35
1. Finland 1 419 18 -23 1. Finland 1 143 13 -42
2. Sweden 1 070 14 -32 2. Russia 922 10 -15
3. Russia 691 9 -32 3. Germany 897 10 -51
4. Latvia 677 9 -42 4. Latvia 886 10 -27
5. Canada 495 6 54 5. Sweden 828 9 -47
6. Germany 464 6 -19 6. Lithuania 791 9 -16
7. Lithuania 352 5 -45 7. France 525 6 99
8. Denmark 299 4 -24 8. Poland 399 5 -42
9. Nigeria 285 4 - 9. Netherlands 304 3 -30
10. Norway 210 3 -49 10. China 219 2 -12

* – Change compared to
same month of
previous year

Exports and imports by commodity sections, February 2009

Commodity section by

Combined Nomenclature (CN)

Exports Imports Balance,
million
kroons
mEEK share,
%
*,
%
mEEK share,
%

*
%

TOTAL 7 864 100 -26 8 948 100 -35 -1 084
Agr. products,food preparations (I–IV) 761 10 -17 1 031 11 -27 -270
Mineral products (V) 1 192 15 6 1 709 19 14 -517
Raw materials, prod. chemical ind. (VI) 397 5 -14 830 9 -24 -433
Articles of plastics and rubber (VII) 219 3 -34 407 5 -39 -188
Wood and products thereof (IX) 688 9 -36 168 2 -61 520
Paper and articles thereof (X) 261 3 -22 234 3 -18 27
Textiles and products thereof (XI) 348 4 -38 491 5 -39 -143
Metals and products thereof (XV) 773 10 -33 716 8 -54 57
Machinery and equipment (XVI) 1 778 23 -25 1 759 20 -41 19
Transport equipment (XVII) 416 5 -54 471 5 -74 -55
Miscellaneous man. articles (XX) 610 8 -27 226 3 -30 384
Other 421 5 -31 906 10 9 -485
* – change compared
to same month
previous year
Source: Statistics Estonia

Migration decreases population by 16,000 persons

When we consider migration in current population as of 1 January 2008 we will get 16,000 people less. It is not one year emigration but eight years’ process where emigration has been bigger than immigration.

The number of population published by Statistics Estonia is based on the 2000 Population and Housing Census data and is complemented by the annual data on registered births and deaths. Since 2000 Statistics Estonia has not used immigration and emigration in the estimation of the population because 2000 Population Census showed that the quality of migration data is low. It was mainly caused by the voluntary registration of the place of residence from the beginning of the 1990s up to 2005. Since 2006 the quality of migration data has improved. Therefore, Statistics Estonia will publish the population number as of 1 January with migration for the years 2000–2008. Migration is a residence change which passes country borders on external migration and county, city and municipality borders on internal migration.

As of 1 January 2008 the population without migration was 1.341 million and with migration 1.325 million. By the cause of external and internal migration the population in several counties, cities and municipalities is considerably different from the present number of population. Major changes have been near the biggest cities (Tallinn, Tartu, Jõhvi, Narva, Pärnu) where people have migrated from the border of counties and cities. The biggest difference as of 1 January 2008 population numbers was in Viimsi rural municipality where the population with migration was twice as big as the population without migration.

Population with and without migration in different local municipalities, 1 January 2008


Population with and without migration by county, 1 January 2008*

County Population without migration Population with migration Difference
Whole Estonia 1 340 935 1 325 408 -15 527
Harju county 523 277 542 976 19 699
Hiiu county 10 118 9 564 -554
Ida-Viru county 170 719 162 395 -8 324
Jõgeva county 36 922 34 533 -2 389
Järva county 36 208 33 545 -2 663
Lääne county 27 552 25 739 -1 813
Lääne-Viru county 67 375 63 867 -3 508
Põlva county 31 175 29 961 -1 214
Pärnu county 88 563 87 508 -1 055
Rapla county 36 684 36 225 -459
Saare county 34 845 33 479 -1 366
Tartu county 149 283 144 458 -4 825
Valga county 34 265 32 628 -1 637
Viljandi county 55 877 52 201 -3 676
Võru county 38 072 36 329 -1 743

* Minus shows that migration decreases the current population number.

Statistics Estonia will continue publishing the population number with and without migration until the new population census. After the 2011 Population Census Statistics Estonia will switch to one unified population number. For the need to ensure consistent time series, Statistics Estonia will use until the 2011 Census in calculations of different indicators the population number without migration based on the currently applied s

In is most important in country level that we would know the information about population and processes that take place in the society. Therefore the census is necessary to compensate mistakes that have occurred and to continue with the uniform information.

An important goal of the 2011 Population Census is to map the actual situation with regard to population composition, social-economic position as well as to territorial location. The Population Census will be a milestone for the work where Estonia can continue with one population number from 1 January in 2012.

Source: Statistics Estonia

Construction price index fell for the first time during the last 14 years

According to Statistics Estonia, in the 1st quarter of 2009 the percentage change of the construction price index was -4.7% compared to the 1st quarter of 2008. Since 1995, the construction price index fell for the first time compared to the same quarter of the previous year.

The fall of the construction price index was mainly influenced by the decrease in the labour costs. In the 1st quarter the labour costs had decreased to the level of the end of 2006. The price indices of building machines and building materials are also in the falling trend. Of building materials, the index was mainly influenced by the fall in the prices of concrete, products of concrete, and of doors and windows.

In the 1st quarter of 2009 compared to the 4th quarter of 2008, the change of the construction price index was -4.1%, mainly influenced by the decrease in the labour costs.

In the 1st quarter of 2009 the percentage change in the repair and reconstruction work price index was -3.9% compared to the 4th quarter of 2008 and -4.5% compared to the 1st quarter of 2008.

The calculation of the construction price index covers four groups of buildings — detached houses, blocks of flats, industrial buildings and office buildings, as well as office buildings covered by the repair and reconstruction work price index. The index expresses the change in the expenditures on construction taking into consideration the price changes of basic inputs (labour force, building materials and building machines).

Change in the construction price index, 1st quarter 2009

  4th quarter 2008 –
1st quarter 2009, %
1st quarter 2008 –
1st quarter 2009, %
TOTAL -4.1 -4.7
labour force -7.9 -10.8
building machines -2.1 -1.8
building materials -2.6 -2.1
Index of detached houses -4.2 -4.6
Index of blocks of flats -4.1 -4.7
Index of industrial buildings -3.9 -4.2
Index of office buildings -4.2 -5.1

Change in the repair and reconstruction work price index, 1st quarter2009

  4th quarter 2008 –
1st quarter 2009, %
1st quarter 2008 –
1st quarter 2009, %
TOTAL -3.9 -4.5
labour force -7.6 -10.7
building machines 0.4 -0.3
building materials -2.1 -1.2
Source: Statistics Estonia

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