Power co approves plans to build shale oil plant

The supervisory board of Estonia’s national power company Eesti Energia approved on Thursday plans to build a shale oil plant using a new, more efficient technology and organize a tender for the construction of up to two new oil shale-fired electricity generation units.

CEO Sandor Liive said the decision to build the complex consisting of the shale oil plant and up to two new generating units is crucial for the future of the Estonian oil shale industry.

“Building a new shale oil plant is Eesti Energia’s next step towards creating a high-quality liquid fuels industry in Estonia and a prerequisite for offering our technologies in other parts of the world,” Liive said.

The planned refinery will use the more environment-friendly, reliable and higher-capacity Enefit technology developed jointly by Eesti Energia and the international engineering company Outotec.

The plant will consume 2.26 million tons of oil shale annually, producing 290,000 tons of shale oil and 75 million cubic meters of carbonization gas used in electric power generation. In addition, a 35-megawatt steam turbine will be integrated into the complex using residual heat of the refining process to produce electricity.

The construction of the unit will start this year and it is to start running in 2011.

The cost of the facility is estimated at close to three billion kroons (EUR 192 mln). The cost of new generating units will become clear along with the outcome of the tenders by the end of 2010 when the final investment decision will be made.

Source: Estonian Investment and Trade Agency
investinestonia.com

Fees of public notaries to go up sharply from June 8

Customers of public notaries will shortly have to pay a lot more for a number of services from June 8, writes Eesti Päevaleht.  The higher tariffs apply for services whose fees are established by law such as attesting power of attorneys, handling of inheritance issues, etc.

Notary fees for attesting a real estate transaction will remain the same.

Read more here: BBN

Deep fall in industrial production

According to Statistics Estonia, in April 2009 compared to April of the previous year, the production of industrial enterprises decreased 34%.

The rapid decrease in industrial production, which had begun at the end of the previous year, continued in April. When in December 2008 the decrease in production was 22% compared to the respective month of the previous year, then in January 2009 the production decreased 26%, in February and March 30%, and in April 34%.

The production in manufacturing fell 36% compared to April of the previous year, which took 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. The sales in external market fell 40% compared to the April of the previous year, the sales in domestic market decreased 30%.

The production decreased in all branches of manufacturing. Compared to April of the previous year, the manufacture of chemical and metal products, metals, building materials and paper products decreased more than a half. The manufacture of wearing apparel, wood and plastic products, electronic products and electrical equipment, motor vehicles and other manufacturing fell more than 30%. The decline was the smallest (9%) in the branch holding the largest share, i.e. the production of food products, which is predominantly oriented to the internal market consumption.

In April compared to April of the previous year, the production of electricity decreased 20%. At the same time imports of electricity increased 60%. Most of the electricity was imported from Lithuania and Latvia. The consumption of electricity fell 6% due to the decline in business customers’ demand. The production of heat decreased 6%.

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

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

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

Economic activity * Change compared to corresponding
month of previous year
according to
unadjusted data
according to
working-day
adjusted datab
TOTAL -2.9 -35.5 -33.7
Energy production -7.7 -14.8 -14.8
Mining 3.7 -12.3 -10.2
Manufacturing -3.0 -37.4 -35.6
manufacture of food products -0.3 -11.0 -9.4
manufacture of wood and wood products 7.2 -35.0 -33.1
manufacture of fabricated metal products -17.0 -54.6 -52.8
man.of computer, electronic, optical pr -7.2 -33.6 -32.3
man. of electrical equipment -0.3 -36.1 -33.7
man. of chemicals and chemical products 10.1 -57.4 -56.0
manufacture of furniture 7.7 -18.7 -15.9
repair/inst. of machinery and equipment 20.8 -22.4 -20.5
manufacture of building materials 3.0 -57.0 -56.0
manufacture of textiles 0.5 -24.1 -21.0

First  figures * – Change compared
to previous month
according to
seasonally
adjusted dataa

a 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.
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.

Retail sales decreased, except sales of second-hand goods

According to Statistics Estonia, in April 2009 compared to April of the previous year the retail sales of goods of retail trade enterprises decreased 15% at constant prices.

In April, 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 by a fourth compared to the same period a year ago. The greatest decrease was recorded in the retail sales of other specialized stores and non-specialized stores as well as stores selling household goods and appliances, hardware and building materials.

Compared to April of the previous year, the retail sales of goods decreased in most economic activities, except the retail sale of second-hand goods in stores and other non-store retail sale, which increased 26% during the year. The sales decrease of these stores does not significantly influence the retail sales of goods of retail trade enterprises, because the share of this economic activity is very small, 1% in April 2009.

The decrease of retail sales in grocery stores has slowed down slightly compared to previous months. In these stores the retail sales of goods decreased 5% compared to April 2008.

Compared to March, the retail sales in retail trade enterprises decreased by one per cent at constant prices.

In April the revenues from sales of retail trade enterprises were 5.5 billion kroons, of which the retail sales of goods accounted for about 85%. Compared to April of the previous year, the revenues from sales decreased 19% at current prices. Compared to the previous month, this indicator increased by one per cent.

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

 

Source: Statistics Estonia

Decline on the construction market is deepening

According to Statistics Estonia, in the 1st quarter of 2009 compared to the same period of the previous year, the total production of Estonian construction enterprises decreased about a third.

In the 1st quarter of 2009 the production value of construction enterprises amounted to 5.0 billion kroons, of which the production value of building construction was 3.2 billion kroons and the production of civil engineering totalled 1.8 billion kroons. Compared to the same period of 2008 the volume of building construction decreased 42% at constant prices. The volume of civil engineering stayed on the same level. The decline was caused mainly by the decreased volumes in dwelling construction on domestic construction market.

Contrary to the domestic construction market which is on decline stage the construction volume in foreign countries increased 6% compared to the same period a year ago. The growth was caused by the building construction.

According to the data of the Register of Construction Works, in the 1st quarter of 2009 the number of dwelling completions was 593, i.e. three times less than in the same period of 2008. More than half (58%) of completed dwellings were situated in blocks of flats. Since the second half of 2007 the demand for new dwellings has been continuously decreasing. In the 1st quarter of 2009 building permits were granted for the construction of 326 dwellings, which is about 3.5 times less compared to the same period of 2008. The most popular type of building was one-family dwelling.

In the 1st quarter of 2009, the number of completed non-residential buildings was 212 with the useful floor area of 260,000 square metres. The useful floor area of office and commercial buildings increased the most. Compared to the same period of 2008, the useful floor area and the cubic capacity of completed non-residential buildings increased.

Trend of construction volume index, 1st quarter 2000 – 1st quarter 2009
(average of quarters of 2005 = 100)

 

 

 

 

Source: Statistics Estonia

Taxes will go up

The Reform Party agreed yesterday to the demand of the People’s Union, a possible new coalition partner, to balance the budget by increasing taxes, writes Postimees.While until now the Reformists had labelled proposals to increase taxes “a doomsday scenario.” They have no changed their tone and yesterday justice minister Rein Lang said: “I can say with full responsibility that without increasing taxes the Estonian state will not come out of this hole.” 

People’s Union had said before the start of the coalition talks yesterday that they propose to raise individual income tax rate by 4%. Reform Party and IRL have already agreeed to incresase VAT rate by 2% to 20.

This puts into an entirely new light prime minister’s words that he said a few weeks ago to a similar proposal of Social Democrats and finance minister Ivari Padar: “Increasing income tax rate is not a debatable issue in this government.”

Now the Reform Party is doing its best to play down such statements and says that it as known six months ago that ways must be find out of the current crisis.

Margus Tsahkna, general secretary of IRL, the third coalition partner, said that the actual situation with state finances could be even worse than what finance minister Ivari Padar projected. “We prefer budget cuts to increasing taxes, but if the situation is really bad, taxes must go up,” said Tsahkna.

Source: BBN

Changes in loan portfolios in line with economic developments

The volume of the portfolio of loans and leasing issued to enterprises and households declined by 1.5 billion kroons, i.e., 0.6% in April with the year-on-year growth rate withdrawing to 0.7%. The development of the banking sector is in line with the current economic situation in Estonia. Thus, it was not surprising the annual growth of both corporate loans and leasing and household consumer credit was negative, i.e., the volume of financing portfolios has decreased year-on-year.

The volume of loans overdue by more than 60 days increased in April, making up 5.2% of the portfolio. In March the respective indicator was 4.5%. Considering the recent months’ changes in the major economic indicators, the April deterioration in the loan portfolio quality was a logical outcome. Nearly 75% of the loan portfolio quality deterioration in April derived from the corporate credit sector; households have so far been more successful in loan servicing. Thus, loans overdue by more than 60 days accounted for 6.4% of the credit issued to enterprises and 3.9% of the credit to households.

Households’ loan servicing ability is affected by declining key interest rates. The interest rate on new housing loans (3.84%) is considerably lower both month-on-month (4.16%) and year-on-year (5.5%). The interest rate on new loans to enterprises has somewhat increased, from 4.8% in March to 5% in April, reflecting changes in banks’ risk assessments as regards corporate credit.

Corporate and household deposit volume did not change considerably in April compared with March. The volume of corporate deposits has declined slightly both month-on-month and year-on-year. Household deposit volume remained the same compared to March, but has increased by 3.1 billion kroons year-on-year. Although the yield of financial markets has improved this year, time deposits are still the main means of investment – their share in the volume of household deposits grew to 61.5% in April.

The average capital adequacy of the banking sector stayed at the level of 22% in April. Banks have made remarkable provisions during this year in order to accumulate buffers for covering possible loan losses. Irrespective of the provisions and accompanying losses, the capitalisation of banks continues to be sufficient to cope with the forecasted loan losses.

See figures from the website of the Bank of Estonia here: http://www.eestipank.info/pub/en/press/Press/pressiteated/pt2009/_05/_228.html

Figure 1. Monthly growth of household and corporate loans and leases in Estonia

Figure 2. The volume of corporate and household deposits (EEK million) in Estonia and the annual deposit growth rate

Figure 3. The weighted average interest rate and 6 months’ EURIBOR of housing loans and long-term corporate loans issued within a month

The financial sector 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

Imports from Germany decreased 49pct

According to Statistics Estonia, in March exports of goods from Estonia at current prices declined by one fifth and imports from Estonia by one third compared to March of the previous year. The decline in both exports and imports slowed down.

In March exports of goods totalled 8.3 billion kroons and imports 9.9 billion kroons. The trade deficit amounted to 1.6 billion kroons, which decreased over a half compared to March of the previous year. As in January this year there was a decrease of 28% in exports and of 36% of imports, then in March the decrease slowed down. Exports decreased by 22% and imports by 30% compared to March of the previous year.

The decline in foreign trade in value terms has been caused by the decrease in demand in Estonian internal market as well as in the main partner markets. According to Eurostat, in January and February a decline was announced in both exports and imports of all Member States. In comparison of the Member States, the decline of exports was the biggest in Finland, Malta and Sweden and the largest decrease in imports was in Lithuania, Latvia, Estonia and Romania.

The main countries of destination were Finland (18% of Estonia’s total exports), Sweden, Latvia and Russia. The decline in value terms in exports of goods to Finland and Latvia influenced the decrease in total exports the most. The increase in exports was registered only to Canada due to the increase in exports of fuels. By value, in March the main commodities exported to Finland, Sweden and Russia were machinery and equipment and, to Latvia — mineral products (incl. electric energy).

The main countries from where goods were imported to Estonia were Finland (14% of Estonia’s total imports), Russia, Germany and Lithuania. The total imports in value terms was mostly influenced by the decline of imports of goods from Germany, Sweden and Finland. Commodities of electrical machinery and equipment accounted for the biggest share imported from Finland and Germany and commodities of mineral products (incl. fuels and natural gas) — from Lithuania and Russia.

In comparison of trade with main partner countries, the largest surplus (exports exceeded imports) was registered in the trade with Sweden and Finland and the largest deficit — with Lithuania and Germany.

In March, the biggest share in Estonia’s total exports was held by the commodities of machinery and equipment, accounting for nearly a fifth. Compared to March of the previous year, the exports of all commodity sections decreased except mineral products (incl. fuels) in case of which exports slightly increased (4%).The biggest decline was in exports of metals and products thereof as well as in machinery and equipment. Exports of metals and products thereof declined nearly by a half compared to March of the previous year.

In March the biggest share of imports was held by machinery and equipment and by mineral products. The share of total Estonia’s imports accounted for a fifth in both commodity sections. The turnover of imports of all the commodity sections declined except mineral products where an increase of a fifth was recorded compared to March 2008. Arrivals of transport equipment and also machinery and equipment declined the most in value terms.

In the 1st quarter of 2009 exports from Estonia at current prices amounted to 23.5 billion kroons and imports to 27.6 billion kroons. Exports decreased by a quarter and imports by a third compared to the 1st quarter of the previous year. The foreign trade deficit was 4.1 billion kroons and it decreased significantly as imports decreased faster than exports. The deficit decreased by 59% compared to the 1st quarter of the previous year.

Estonia’s foreign trade, January–March, 2008–2009

Month Exports,
million kroons
Imports,
million kroons
Balance,
million kroons
2008 2009 Change, %   2008 2009 Change, % 2008 2009
January 10 155 7 303 -28 13 745 8 773 -36 -3 590 -1 470
February 10 679 7 867 -26 13 632 8 912 -35 -2 953 -1 045
March 10 652 8 295 -22 14 145 9 899 -30 -3 493 -1 604
1st quarter 31 486 23 465 -25 41 522 27 583 -34 -10 036 -4 118

Main foreign trade partners of Estonia, March 2009

Country of destination,
group of
countries

Exports,
million kroons

Share,
%

*,
%

Country of
consignment,
group of
countries

Imports,
million
kroons

Share,
%

**,
%
Total 8 295 100 -22 Total 9 899 100 -30
EU27 5 991 72 -23 EU27 7 674 78 -34
CIS 888 11 -28 CIS 1 375 14 -10
1. Finland 1 496 18 -22 1. Finland 1 392 14 -32
2. Sweden 1 286 16 -14 2. Russia 1 103 11 7
3. Latvia 770 9 -34 3. Germany 1 046 11 -49
4. Russia 696 8 -29 4. Lithuania 1 005 10 -8
5. Germany 556 7 -1 5. Latvia 881 9 -23
6. Lithuania 401 5 -32 6. Sweden 808 8 -45
7. Denmark 344 4 -2 7. Poland 426 4 -43
8. USA 323 4 -27 8. Netherlands 404 4 -14
9. Canada 260 3 - 9. Denmark 319 3 -9
10. Norway 259 3 -33 10. Belgium 233 2 -31
*- change compared
to same month
of previous year
**- change compared
to same month
of previous year

Exports and imports by commodity sections, March 2009

Commodity section by Combined Nomenclature (CN) Exports Imports

Balance,
mEEK

mEEK share,
%
*,
%
mEEK share,
%
*’,
%
TOTAL 8 295 100 -22 9 899 100 -30 -1 604
Agricultural products and food preparations (I–IV) 786 9 -16 1 192 12 -13 -406
Mineral products (V) 1 060 13 4 1 952 20 20 -892
Raw materials and products of chemical industry (VI) 378 4 -26 1 021 10 -19 -643
Articles of plastics and rubber (VII) 247 3 -23 479 5 -28 -232
Wood and products thereof (IX) 792 10 -21 224 2 -47 568
Paper and articles thereof (X) 294 4 -17 236 2 -26 58
Textiles and products thereof (XI) 408 5 -14 576 6 -28 -168
Metals and products thereof (XV) 740 9 -47 852 9 -43 -112
Machinery and equipment (XVI) 1 824 22 -19 1 977 20 -37 -153
Transport equipment (XVII) 589 7 -38 526 5 -71 63
Miscellaneous manufactured articles (XX) 724 9 -11 237 2 -32 487
Other 453 5 -28 627 7 -29 -174

* – change compared
to same month
of previous year

 

**- change compared
to same month
of previous year

The preliminary foreign trade data about March were released by Statistics Estonia on 11 May (on 40th day after the end of the reference period). This news release provides the revised data and offers a more detailed overview of trade about the month under observation

Source: Statistics Estonia.

Salaries decreased for the first time

According to Statistics Estonia, in the 1st quarter of 2009, the average monthly gross wages and salaries were 12,147 kroons and the hourly gross wages and salaries were 76.53 kroons. Compared to the 1st quarter of the previous year, the average monthly gross wages and salaries were by 1.5% lower and the average hourly gross wages and salaries were by 2.4% higher. Since 1993, the average monthly gross wages and salaries decreased for the first time as compared to the same quarter of the previous year.

The growth of real wages which took into account the influence of the change in the consumer price index continued decreasing in the 1st quarter. If in the 2nd and 3rd quarter of 2008 real wages increased slightly over 3%, then in the 4th quarter real wages decreased 1.3% and in the 1st quarter of 2009 real wages decreased by 4.5%. Compared to the end of March 2008, the number of employees decreased 6.7% as of the end of March.

Compared to the 1st quarter of 2008, the average monthly gross wages and salaries increased the most in electricity, gas, steam and air conditioning supply — 14.0%. The monthly gross wages and salaries decreased the most in financial and insurance activities and in construction — in both activities 10.2%.

Compared to the 1st quarter of 2008, the average hourly gross wages and salaries increased the most in electricity, gas, steam and air conditioning supply — 16.4%. The gross hourly wages decreased the most in professional, scientific and technical activities and in construction — in both activities 3.6%.

The average gross wages and salaries were 12,207 kroons in January, 11,884 kroons in February and 12,373 kroons in March.

In the 1st quarter of 2009, the employer’s average monthly labour costs per employee were 16,512 kroons and the average hourly labour costs were 112.23 kroons. Compared to the 1st quarter of 2008, the average monthly labour costs per employee decreased 0.4% and the average hourly labour costs per employee increased 4.1%.

Compared to the 1st quarter of 2008, the average monthly labour costs per employee increased the most in electricity, gas, steam and air conditioning supply (16.7%) and decreased the most in financial and insurance activities (8.1%).

Compared to the 1st quarter of 2008, the average hourly labour costs increased the most in electricity, gas, steam and air conditioning supply (19.2%) and decreased the most in financial and insurance activities (4.0%).

Statistics Estonia conducts the survey of wages and salaries statistics on the basis of international methodology since 1992. In 2009, the sample includes 11,263 enterprises, institutions and organisations. The average monthly gross wages and salaries have been given in full time units to enable a comparison of different wages and salaries, irrespective of the length of working time. Calculations of the monthly gross wages and salaries are based on payments for actually worked time and remuneration for time not worked. The hourly gross wages and salaries do not include remuneration for time not worked (holiday leave pay, benefits, etc.). In short term statistics, the average gross wages and salaries are measured as a component of labour costs. Labour costs include gross wages and salaries, employer’s contributions and employer’s imputed social contributions to employees.

Average monthly gross wages and salaries, 1st quarter 2005 – 1st quarter 2009 (kroons)

  Year 1st quarter 2nd quarter 3rd quarter 4th quarter
2005 8 073 7 427 8 291 7 786 8 690
2006 9 407 8 591 9 531 9 068 10 212
2007 11 336 10 322 11 549 10 899 12 270
2008   12 337 13 306 12 512 13 117
2009   12 147      

Average monthly gross wages and salaries and monthly labour costs per employee,
1st quarter 2009


Average hourly gross wages and salaries and hourly labour costs, 1st quarter 2009


Source: Statistics Estonia

Tax calendar 2009

See here on the website of the Estonian Tax and Customs Board

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