Attract Russian tourists with tax-free shopping

Tax free limit, which was applied at the beginning o the year, increased tourists’ interest so remarkably that Juhan Parts, the Minister of Economic Affairs and Communication thinks that the limit could be lowered more, Eesti Päevaleht reports.
Last year a tourist has to spend at least EEK 2500 to get tax discount. This year the amount has decreased by EEK 500. According to traders’ union recent statistics Russians made nearly 50 pct more purchases from the shops.

The number of foreign tourists’ tax free purchases increased by 60 pct, Marika Merilai, the head of the Estonian traders’ union said.

Read more from BBN here

Foreign trade declined sharply

According to Statistics Estonia, in January exports of goods in current prices totalled 7.2 billion kroons and imports 8.8 billion kroons. Compared to January of the previous year, exports declined by 29% and imports 36%. The decrease in value of exports and imports began already in November 2008.

In January exports of goods was 2.9 billion kroons smaller than in January of the previous year. The decline in exports was mainly caused by the decrease in exports to the European Union countries. The decline in exports was also partly caused by the high comparative indicators last year. Exports was last on such a low level in the 1st quarter of 2005.

In January imports of goods was 5 billion kroons smaller than in January 2008. The decline in the imports was mainly caused by the decrease of imports from the EU countries. The decrease was also partly caused by the high comparative indicators last year.

Estonian foreign trade deficit was 1.6 billion kroons in January, which was 2.1 billion kroons less than in January of the previous year. The foreign trade deficit was so small last in January 2005.

In January the share of the European Union (EU 27) countries was 74% and the share of the CIS countries accounted for 10% of the total exports (in January of the previous year 75% and 10%, respectively). The main countries of destination for goods were Finland, Sweden and Latvia. Exports to EU countries decreased by 2.3 billion kroons and to CIS countries by 0.3 billion kroons compared to January of the previous year. Exports to Latvia, Finland and Sweden decreased the most.

In total imports of goods, the share of the EU 27 countries was 73% and that of the CIS countries 16% (in January of the previous year 80% and 12%, respectively). The main countries of consignment were Finland, Russia and Germany. Imports from the EU countries decreased by 4.7 billion kroons compared to January of the previous year. Imports from Sweden, Finland and Germany declined the most.

The trade deficit between the EU countries decreased from 3.5 billion kroons to 1.1 billion kroons compared to January of the previous year.

In both exports and imports, the most important commodity section in January was machinery and equipment, which accounted for nearly a quarter of both flows. In January there was a decrease of both exports and imports among all of the commodity chapters. Exports of transport equipment, metals and products thereof and wood and products thereof decreased significantly. The decrease in imports was mainly caused by the decrease in arrivals of transport equipment, machinery and equipment and mineral products (incl. fuels).

Estonia’s foreign trade, 2008–2009 (million kroons)

Year Month Exports Imports Balance
2008 January 10 155 13 827 -3 672
  February 10 679 13 693 -3 014
  March 10 652 14 186 -3 534
  April 12 338 15 927 -3 589
  May 11 555 14 502 -2 947
  June 10 863 14 126 -3 263
  July 10 972 15 088 -4 116
  August 11 144 13 488 -2 344
  September 12 309 15 285 -2 976
  October 13 247 15 726 -2 479
  November 9 898 12 950 -3 052
  December 8 644 11 714 -3 070
2009 January 7 234 8 810 -1 576

Main foreign trade partners of Estonia, January 2009

Country of destination,
group of
countries
Exports, mEEK kroons Share,
%
Change
comp to
same month
prev year,
%
group of
countries
Imports,
million
kroons
Share,
%
Change
comp
same month
prev year,
%
TOTAL 7 234 100 -29 TOTAL 8 810 100 -36
EU 27 5 330 74 -30 EU 27 6 440 73 -42
CIS 717 10 -27 CIS 1 407 16 -13
1. Finland 1 457 20 -24 1. Finland 1 251 14 -40
2. Sweden 1 102 15 -30 2. Russia 947 11 -25
3. Latvia 674 9 -46 3. Germany 900 10 -47
4. Russia 550 8 -25 4. Latvia 804 9 -35
5. Germany 487 7 -6 5. Sweden 767 9 -52
6. Lithuania 353 5 -46 6. Lithuania 704 8 -31
7. Denmark 318 4 -5 7. United Kingdom 330 4 -56
8. Norway 240 3 -30 8. Belarus 325 4 97
9. Canada 166 2 14 9. Poland 312 4 -47
10. Netherlands 152 2 -48 10. China 305 4 -2

Exports and imports of goods by commodity sections, January 2009

Commodity section
by Combined
Nomenclature (CN)
Exports Imports Balance,
mEEK
mEEK share,
%
change com
same month 
prev.y,
%
mEEK share,
%
compared

 to same

 month
prev y,
%

TOTAL 7 234 100 -29 8 810 100 -36 -1 576
Agricultural products and food preparations (I–IV) 719 10 -16 1 075 12 -19 -356
Mineral products (V) 819 11 -24 1 618 18 -27 -799
Raw materials and products of chemical industry (VI) 377 5 -3 767 9 -24 -390
Articles of plastics and rubber (VII) 212 3 -36 411 5 -34 -199
Wood and products thereof (IX) 637 9 -40 162 2 -55 475
Paper and articles thereof (X) 228 3 -34 238 3 -22 -10
Textiles and products thereof (XI) 385 5 -26 517 6 -29 -132
Metals and products thereof (XV) 710 10 -40 680 8 -46 30
Machinery and equipment (XVI) 1756 24 -15 1 970 22 -32 -214
Transport equipment (XVII) 361 5 -60 671 8 -67 -310
Miscellaneous manufactured articles (XX) 644 9 -24 211 2 -39 432
Other 386 6 -32 490 5 -34 -104
Source: Statistics Estonia

Overdue loans 4% of banks’ loan portfolio

The volume of banks’ loan and leasing portfolio declined 0.4%, i.e., 1.1 billion kroons in February. The decrease was relatively moderate considering the current economic situation. The total portfolio volume in February was 266 billion kroons. The contraction in the volume of the loan and leasing portfolio was rather uniform across both enterprises and households. The current corporate credit need is mostly affected by more modest economic activity. Households’ loan behaviour is influenced by future uncertainties, which means people prefer saving to consumption. This is well reflected in the February change in consumer credit volume, which dropped by 443 million kroons (including the 103-million-kroon decrease in car lease), i.e., 1.5%.

The volume of household deposits increased in February, whereas the volume of corporate deposits decreased. The annual growth of household and corporate deposits was 0.5% in February with the total volume of deposits amounting to 104.8 billion kroons. The volume of household deposits grew by 942 million kroons, i.e., 1.7%. The volume of corporate deposits fell by 497 million kroons, i.e., 1%.

The share of loans overdue by more than 60 days in the loan portfolio increased by 0.5 pp in February, amounting to 4.1% of the banks’ loan portfolio at the end of the month. The share of household overdue loans did not expand in February, but the existing overdue loans remained in default. As regards enterprises, the volume and share of loans overdue by more than 60 days increased the most in the construction and real estate sector. All in all, loans overdue by more than 60 days accounted for 4.7% of the corporate loan portfolio.

Since the loan portfolio shrank, the average capital adequacy ratio of banks went from 19.5% in January to 19.8% in February. Banks have accumulated sufficient capital buffers in recent years to cope at a time when loan losses may considerably expand.

The decrease in international money market interest rates keeps easing the debt burden of earlier borrowers. Since key interest rates fell, the average interest rate on new mortgage loans and long-term corporate credit issued in February sank to 4.6% and 4.8%, respectively. The risk margins of banks are higher than a year ago, but stabilised in February. This shows the credit market situation has become slightly clearer.

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; here you can also see the graph

Estonia supports visa freedom for Macedonia

In his meeting with Macedonian Foreign Minister Antonio Milošoski in Tallinn, Foreign Minister Urmas Paet confirmed Estonia’s support for Macedonia’s accession to NATO and the beginning of its accession negotiations with the European Union. “We have always supported the open door policy for those nations that are prepared to accede,” said Paet.
According to Foreign Minister Paet, Estonia hopes that the name dispute with Greece will soon be resolved and Macedonia will become a member state of both NATO and the European Union.
While talking about Macedonia’s prospect for visa freedom with the EU, Foreign Minister Urmas Paet expressed hope that it would be possible to eliminate visa requirements for Macedonian citizens this year. Foreign Minister Milošoski stated that Macedonia has completed its preparations for visa freedom. “Estonia supports visa freedom to the European Union for all Western Balkan countries,” emphasised Foreign Minister Paet.
During their meeting, Foreign Minister Antonio Milošoski informed Paet of Macedonia’s intention to turn their existing diplomatic representation in Tallinn into the Macedonian Embassy in Estonia. Foreign Minister Paet stated that this would make the active relations between the two nations even tighter. During his visit to Macedonia last November, Foreign Minister Paet opened Estonia’s first honorary consulate in the Western Balkans in Skopje.
Another affirmation of tight Estonia-Macedonia relations is the 60 visits on various levels that have taken place between Estonia and Macedonia within the past two years. Foreign Minister Paet stated that Estonian businessmen have more contacts in Macedonia now. “However, we still have room for development in reciprocal trade and increasing investments,” said Paet. “We are ready to share our experience in building and implementing a strategic goods control system with Macedonia,” he added.
Foreign Minister Milošoski also met with Prime Minister Andrus Ansip, who congratulated Milošoski on the successfully organised elections. On 22 March, the first rounds of the presidential and local government elections were held in Macedonia.

Source: Estonian Review (vm.ee)

Decrease in transport services

According to the preliminary data of Statistics Estonia, in 2008 the usage of services of passenger transport enterprises decreased by about a tenth compared to 2007. The volume of carriage of goods decreased by a fourth compared to the previous year.

In 2008, the number of passengers carried by Estonian transport enterprises was over 193.4 million. 93% of passengers used road transport (incl. city transport by buses, trams and trolley buses), 4% sea transport, 3% rail transport and less than 1% air transport.

Around 186.6 million passengers were carried in domestic traffic, the number of passengers decreased by a tenth compared to the previous year. 80% of passengers in domestic traffic used city transport. The number of passengers in domestic traffic using buses, rail and sea transport decreased, but it increased in domestic flights.

The amount of passengers in international traffic was around 6.8 million, 5% more than in 2007. The number of passengers in international traffic increased in sea, road and rail transport, but around a third less passengers used international flights compared to the previous year.

In 2008, the volume of goods carried by Estonian transport enterprises was 15.3 billion tonne-kilometres. In domestic traffic the freight turnover was 3.1 billion tonne-kilometres and in international traffic it was 12.2 billion tonne-kilometres or 80% of the total freight turnover. The freight turnover was mainly influenced by road and rail transport in international traffic, where the freight turnover decreased by 28% and by 32%, respectively, compared to the previous year.

Passenger transport, 1998–2008

Source: Statistics Estonia

Former Kalev Meedia bankrupt

Via Concept (former Kalev Meedia), a subsidiary of AS Luterma (former AS Kalev) filed a bankruptcy application to the Harju County Court, the company announced on Tallinn Stock Exchange.

The bankruptcy application is caused by permanent insolvency. The reason behind it is fallen advertisement market in 2008 and the company also couldn’t get additional finances from credit institutions.

Harju County Court will make a decision on bankruptcy process within 10 days.

Source: BBN

Darkening Tallinn increases crime

Jüri Pihl, the Minister of Interior was critical for Tallinn city government’s decision to switch off the lights, when speaking in front of the Parliament yesterday, ERR News reports. 

“The risk of being a victim of the crime is certainly higher in the dark, unlighted streets and in depopulated areas. Local municipalities and companies have a great part here: whether they’re able to cover risk areas with video surveillance, whether they can guarantee street lighting. I’m perplexed that in the mornings the light is gone and certainly the risk of being a victim of the crime has increased,” Pihl said.

He said that one risk group may be pensioners, who move in the mornings – to go out with dog, for instance.

After the lighting has been switched off, video surveillance cameras are also useless.

Tallinn city government confirmed they’re still testing switching off the street lights and next week they have a meeting with the police, ambulance and scientists from the Tallinn University of Technology.

Source: BBN