Fall in General Government’s debt level lasts

According to preliminary data of Statistics Estonia, the Estonian general government sector surplus in 2007 was 2.8% and consolidated gross debt level was 3.4% of Gross Domestic Product (GDP). As in previous years, the general government gross debt level continued to fall last year.

In 2007, the total revenues of the general government sector consolidated budget exceeded the expenditures by 6.9 billion kroons. The central government sector surplus was 2.5% of GDP and the surplus of social security funds was 0.6% of GDP. Reached surplus in 2006, the local governments sector’s consolidated budgets fell in deficit again: -0.3% of GDP.

The general government gross debt level in 2007 decreased compared to the last two years. At the same time the central government’s debt level decreased 10% compared to 2006, the borrowing of the local governments sector increased by 9%, accounting for 69% of the gross debt.

After the consultations with Eurostat Statistics Estonia decided to reclassify to the general government sector several public limited companies and foundations whose economic activity by the rules of national accounts do not meet the conditions of the market producer.

The impact of the reclassification decisions are already accounted in the calculations of the general government deficits and debt levels. By the preliminary estimations entering the public limited companies and foundations to the list of government units impacts the balance-accounting as follows:

	2004	2005	2006	2007
Surplus, % of GDP	1.6	1.8	3.4	2.8
Impact of reclassifications to the surplus	-0.2	-0.1	-0.2	-0.4
Debt level, % of GDP	5.1	4.5	4.2	3.4
Impact of reclassifications to the debt level	0.1	0.1	0.2	0.5

Revised data for 2007 will be published on 30 September.

General Government Sector comprises, in addition to State and Local Government institutional units, the State and Local Governments extra-budgetary funds and foundations, public-legal institutions and non-market producing public enterprises. The General Government sector consolidated budget represents in addition to the balance of revenues and expenditures of the State and Local Governments own budgets also the balance of revenues and expenditures of the State and Local Governments extra-budgetary funds and foundations, public-legal institutions and non-market producing public enterprises budgets.

Source: Statistics Office

In February the retail sales slightly increased

According to Statistics Estonia, in February 2008 compared to February of the previous year the retail sales of goods of retail trade enterprises grew 4% in constant prices. The growth of retail sales that had stopped in January showed a slight increase in February.

In February, the retail sales of goods of retail trade enterprises were 4.2 billion kroons, which is a half billion kroons more than at the same time a year ago. If in January 2008 compared to January of the previous year the growth of retail sales of goods decreased to zero, then in February the annual growth of retail sales in constant prices was as big as in December 2007.

The growth rate in grocery stores was slightly higher in February than in the previous months, the increase was 4% during the year. Due to the large share, grocery stores covered over 65% of the total increase in the sales of the retail trade enterprises. Retail sales of pharmaceutical goods and cosmetics increased 9%, retail sales in non-specialized stores selling industrial goods and stores selling textiles, clothing and footwear increased 7% compared to February of the previous year. The growth of retail sales of non-specialized stores selling industrial goods and stores selling textiles, clothing and footwear was due to the special sales campaign.

Compared to January, the retail sales in retail trade enterprises stayed at the same level, but according to seasonally adjusted data the retail sales increased 3%.

In February the revenues from sales of retail trade enterprises were about 5 billion kroons, of which retail sales of goods accounted for 85%. Compared to February 2007, the revenues from sales increased 14% in current prices. Compared to the previous month, this indicator increased 1%.

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

Source: Statistics Office

Gap between salaries too big

Analyst Kulno Türk believes that the current system where the highest-earning executive of a state enterprise makes 140,000 kroons a month and the Prime Minister earns 70,000 kroons is illogical.

Türk told Postimees that the gap between top executives of state enterprises and top politicians should be lower. For instance, President Toomas Hendrik Ilves is making 86,000 kroons a month.

Source: BBN

In January the foreign trade deficit decreased

According to Statistics Estonia, in January 2008 the exports of goods increased and the imports decreased. The trade deficit was the lowest during the last 12 months.

In January 2008 the exports was 10.1 billion kroons and the imports was 13.2 billion kroons. Compared to January of the previous year, the value of exports rose 4% and imports fell 4%. The trade deficit was 3.1 billion kroons. Compared to January 2007, the trade deficit decreased by about a billion kroons and was the smallest during the last 12 months.

In January 2008 the share of the EU countries was 75% and the share of CIS countries accounted for 10% of the total exports. The most important partners in exports were Finland, Sweden and Latvia, accounting for 46% of the total exports. Exports to the EU countries increased 1.1 billion kroons compared to January 2007.

In total imports the share of the EU countries was 79% and that of CIS countries 12%. The most important partners in imports were Finland, Germany and Sweden, accounting for 38% of the total imports. Imports from the EU countries increased 272 million kroons compared to January 2007.

The foreign trade deficit with the EU countries decreased from 3.8 billion kroons to 3 billion kroons compared to January of the previous year. Compared to January 2007, the trade deficit with the CIS countries has dropped from 1.5 billion kroons to 0.6 billion kroons. The biggest trade surplus was mentioned with Norway (247 million kroons) and Sweden (98 million kroons). The biggest trade deficit was announced with Germany (1.0 billion kroons), Russia (484 million kroons) and Lithuania (282 million kroons).

In both exports and imports the most important commodity section was machinery and equipment (the share 20% of exports and 21% of imports). Compared to January 2007, the greatest increase in exports was in the metals and products thereof (62%), transport equipment (20%) and agricultural products and food preparations (19%). The exports of mineral products decreased significantly (42%). The imports increased in the sections of raw materials and products of chemical industry (12%) and agricultural products and food preparations (10%). Among other commodity sections the imports decreased. The biggest decline in imports was in the section of wood and products thereof (18%) and paper and articles thereof (18%).

The surplus in the trade balance was mentioned as positive (active trade balance) in the sections of wood and products thereof (694 million kroons) and miscellaneous manufactured articles (520 million kroons). The biggest foreign trade deficit was mentioned in the section of mineral products (1.2 billion kroons), transport equipment (849 million kroons) and machinery and equipment (778 million kroons).

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

Year	Month	Exports	Imports	Balance
2007	January	9 682	13 820	-4 138
	February	9 759	13 198	-3 439
	March	10 434	15 387	-4 953
	April	10 406	15 495	-5 089
	May	11 704	16 026	-4 322
	June	10 747	14 963	-4 216
	July	9 876	13 940	-4 064
	August	10 256	14 464	-4 208
	September	9 800	14 429	-4 629
	October	11 792	15 967	-4 175
	November	11 857	15 654	-3 797
	December	9 241	13 325	-4 084
2008	January	10 053	13 207	-3 154

Main foreign trade partners of Estonia, January 2008

Country of destination, group of countries	Exports, mln kroons	Share, %	Country of consignment, group of countries	Imports, mln kroons	Share, %
TOTAL	10 053	100	TOTAL	13 207	100
EU 27	7 495	75	EU 27	10 462	79
CIS	1 012	10	CIS	1 642	12
1. Finland	1 888	19	1. Finland	2 017	15
2. Sweden	1 594	16	2. Germany	1 562	12
3. Latvia	1 095	11	3. Sweden	1 496	11
4. Russia	763	8	4. Russia	1 247	9
5. Lithuania	650	7	5. Latvia	1 213	9
6. Germany	524	5	6. Lithuania	932	7
7. Norway	340	3	7. Poland	597	5
8. Denmark	323	3	8. United Kingdom	469	4
9. Netherlands	296	3	9. Netherlands	443	3
10. United Kingdom	281	3	10. China	307	2

Exports and imports by commodity sections, January 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	10 053	100	4	13 207	100	-4	-3 154
Agricultural products and food preparations (I–IV)	839	8	19	1 265	10	10	-426
Mineral products (V)	1 053	10	-42	2 214	17	-10	-1 161
Raw materials and products of chemical industry (VI)	406	4	13	1 015	8	12	-609
Articles of plastics and rubber (VII)	328	3	16	626	5	-1	-298
Wood and products thereof (IX)	1 039	10	11	345	3	-18	694
Paper and articles thereof (X)	339	3	9	271	2	-18	68
Textiles and products thereof (XI)	500	5	2	728	6	6	-228
Metals and products thereof (XV)	1 186	12	62	1 212	9	-11	-26
Machinery and equipment (XVI)	2 011	20	-2	2 789	21	-2	-778
Transport equipment (XVII)	920	9	20	1 769	13	-1	-849
Miscellaneous manufactured articles (XX)	846	8	9	326	2	-2	520
Other	586	6	27	647	5	-28	-61

Source: Statistics Office

Volume of Estonian Security Market Over 2 Billion in 2007

The aggregate volume of the security services market in Estonia amounted to 2.1 billion kroons in 2007.

The turnover of guarding services accounted for 0.9 billion kroons of the total. Installation and maintenance of security equipment contributed 0.6 billion kroons, the industry body said.

The turnover from other security services, including transportation of money and valuables, consultations, express delivery services and public services, totalled 340 million kroons.

The year-on-year growth in the sale of security services and products was 26 percent, which has been relatively stable in the last few years. In guarding services a growth of 16.5 percent and in equipment installation and maintenance 33.3 percent were recorded.
There are around 6,000 security workers in Estonia at present. Last year 1,026 new jobs were created. The average salary in the sphere of security increased by 27.5 percent in 2007.

Source: Estonian Review

Estonian Investment Bank Gild Bankers Triples Profit in 2007

The investment bank Gild Bankers made a net profit of around 81 million kroons last year, more than tripling the 2006 result.

Consolidated net income from service fees amounted to 134 million kroons, compared to 60 million kroons a year ago, a representative of the bank said.

Last year was the most successful in the company’s history, senior partner Rain Tamm said. “Among other things, the year 2007 marks the expansion of Gild’s international reach. In addition to opening offices in Sofia and London, we increased the share of fund investments outside the Baltic region,” he said.

Last year Gild also laid the foundation of private banking, a new business line, and acted as consultant in almost twice as many consolidations and takeovers as in 2006. Gild’s assets in funds surged by almost 30 percent to 2.2 billion kroons in 2007.

Gild Bankers is an independent investment bank with offices in Estonia, Latvia, Lithuania, Ukraine, Bulgaria and the United Kingdom. Gild manages alternative funds, advises mergers and takeovers, attracts capital and provides private banking services.

Source: Estonian Review

Transport of goods by rail decreased considerably

According to the preliminary data of Statistics Estonia, in 2007 the usage of services of passenger transport enterprises remained on the same level compared to 2006. The carriage of goods by road transport enterprises increased and by rail decreased compared to the previous year.

In 2007, the number of passengers carried by Estonian transport enterprises was around 213 million. 97% of passengers were carried in domestic traffic as in previous years.

The number of passengers in domestic traffic was 207 million. 93% of them used road transport (incl. city transport by buses, trams and trolley buses). The number of road transport passengers in domestic traffic was about the same as in 2006. The number of passengers in domestic traffic by sea and by rail increased by 15% and by 3%, respectively. Air transport was used 15% less on domestic flights compared to 2006.

The amount of passengers in international traffic was 6 million, as much as in 2006. The carriage of passengers in international traffic was most influenced by sea and air transport. Over 4 million passengers (6% more than a year earlier) used the services of sea transport enterprises, over 1 million passengers (22% less than in the previous year) used the services of air transport. Around 1 million passengers used road transport in international traffic, where the increase was the biggest (9%). 150,000 passengers used rail transport in international passenger traffic, about 5% more than a year ago.

The volume of goods is best characterised by freight turnover in tonne-kilometres. In 2007, the volume of goods carried by Estonian transport enterprises was 20.4 billion tonne-kilometres or 1% less than a year ago. 10.6 billion tonne-kilometres of goods were carried by road and 8.4 billion by rail transport enterprises. Sea transport accounted for 1.4 billion tonne-kilometres. In road transport the freight turnover increased by a fifth, but in rail transport decreased by a fifth compared to 2006.

In domestic traffic the freight turnover was 3.3 billion tonne-kilometres, increasing by about a fourth compared to the previous year. Road traffic accounted for three fourths of domestic traffic.

The freight turnover of international traffic was 17.1 billion tonne-kilometres or 84% of the total freight turnover. The freight turnover of international traffic decreased 4% compared to the previous year. The freight turnover of international traffic was mainly influenced by road and rail transport where the freight turnover increased 20% and decreased 22%, respectively, compared to the previous year.

Source: Statistics Office

Stoneridge to Build Factory Outside Tallinn

Stoneridge Electronics AS, builder of electronic components for the automobile industry will build a factory in the Tänassilma technical park in the Saue rural community outside Tallinn, providing jobs for 260 people, 60 of them new workers.

According to plans the new facility will be completed in August; at present it operates in the Järve area of Tallinn.

The company that assembles electronic components for motor vehicles such as MAN, Volvo, Daimler-Benz and Scania will lay the corner-stone of its new facility on 26 March. In addition to assembly work the facility will also go into the product development line, the company said.

Stoneridge-Pollak, a company of US owners, would close its facility in England and transfer production to Estonia and China.

According to the report for the financial year 2006 Stoneridge Electronics posted sales proceeds of 448 million kroons and a net profit of about 46 million kroons.

Source: Estonian Review

Producer price indices in February

According to Statistics Estonia, in February 2008 the percentage change in the producer price index was 0.7% compared to January 2008 and 8.3% compared to February 2007.

In February compared to January 2008 the producer price index was mainly influenced by the increase in prices in the energy supply and in the manufacture of textile and textile products.

In February compared to February 2007 the producer price index was mainly influenced by the increase in prices in the energy supply and in the manufacture of food and beverages.

Change in the producer price index by economic activity, February 2008

Economic activity	January 2008 – February 2008, %	February 2007 – February 2008, %
TOTAL	0.7	8.3
Energy supply	1.0	11.7
Mining	0.2	8.8
Manufacturing	0.7	8.0

In February 2008 the percentage change in the export price index was 0.1% compared to January 2008 and 6.4% compared to February 2007.

In February compared to January the export price index was mainly influenced by the increase in prices in the manufacture of plastic products and metal products and by the decrease in prices in the manufacture of electrical machinery and apparatus.

In February 2008 the percentage change in the import price index was –0.6% compared to January 2008 and 4.6% compared to February 2007.

In February compared to January the import price index was mainly influenced by the decrease in prices in the manufacture of mineral fuels and in the manufacture of electrical machinery and apparatus.

Soutce: Statistics Office

In January the number of accommodated tourists was small

According to Statistics Estonia, in January 119,000 tourists stayed in accommodation establishments of Estonia, which is 2% more than in the same period of the previous year. The attendance of accommodation establishments was low, because less than one third of rooms were occupied.

In January, characteristic of the beginning of the year, Estonian residents (52% of tourists) predominated in accommodation establishments. The number of Estonian residents increased 5% and the number of foreign tourists decreased 1% compared to January of the previous year. In January 45% of foreign tourists came from Finland, 17% from Russia and 7% from Latvia. As compared to January a year ago, significantly more Latvian tourists stayed in accommodation establishments. The number of tourists from our main tourist partner state, Finland, and Russia stayed on the same level as in January 2007.

675 accommodation establishments with 15,900 rooms and 34,100 beds were available for tourists. Characteristic of the beginning of the year the room occupancy rate was small — 29%. The room occupancy rate was highest (37%) in large accommodation establishments with more than 100 rooms. In small accommodation establishments with up to 9 rooms, the room occupancy rate was low — 14%, staying one percentage points lower than during the same time of the previous year.

In January the average cost of a guest night in an accommodation establishment was 448 kroons. Compared to the previous year, the average cost of a guest night increased 6 kroons. In large accommodation establishments with more than 100 rooms, the average cost of a guest night was 497 kroons. In small accommodation establishments with up to 9 rooms the average cost of a guest night was about a half cheaper — 257 kroons.

Accommodation by regions, January 2008

Accommodation	Total	Northern Estonia	North-eastern Estonia	Central Estonia	Western Estonia	Southern Estonia
Accommodation establishments	675	158	49	56	189	223
Rooms	15 911	7 625	1 019	725	3 512	3 030
Beds	34 085	15 340	2 092	1 740	7 810	7 103
Room occupancy rate, %	29	32	30	16	25	25
Bed occupancy rate, %	23	27	27	12	19	20
Tourists accommodated	119 244	63 127	7 280	4 244	20 171	24 422
Nights spent	244 351	128 691	17 496	6 587	47 106	44 471
residents of Estonia	112 152	29 886	12 094	5 454	29 547	35 171
foreign visitors	132 199	98 805	5 402	1 133	17 559	9 300
Average cost of a guest night, kroons	448	530	378	326	342	369

Source: Statistics Office