Statistical yearbook reflects in figures the life of Estonia

Statistics Estonia presents today, i.e. on 31 July, the newly published publication “Eesti statistika aastaraamat. 2009. Statistical Yearbook of Estonia“, which gives an overview of the Estonian environment, social and economic life and provides comparisons with other European countries.

Statistical Yearbook of Estonia covers in figures the major spheres of life of the state and places the latest data next to the data published earlier. At the presentation of the yearbook, Statistics Estonia also looks ahead and seeks an answer to the question on how sustainable the development of Estonia is on the basis of recent trends, bearing in mind the objectives: better coherence of the society, attainment of economic welfare and maintenance of ecological balance.

Estonia recovered fast after the economic difficulties at the end of nineties. The growth rate of GDP accelerated after the accession to the European Union (EU), rising over 10% in the second half of 2005. Double-digit growth rates persisted for over a year. Above all, economic success was made possible by cheap loans. The situation was favourable for loan stock to increase with the expanding real-estate boom. During 2000–2007 the loan stock of private persons increased more than ten times. Enterprises could spare resources for expansion and their value added thrived. In prosperous economic climate the income of households increased fast which in turn contributed to the growth of domestic demand. Economic growth, brought on largely by loan money and based on domestic demand, proved to be fleeting and ten years after the last crisis Estonian economy is once again in recession. At the beginning of 2008 we were expected to endure “soft landing”, but already in the 2nd quarter the GDP of Estonia started to descend drastically compared to the same period in 2007. Economic cooling affected the majority of developed countries in 2008. In almost all European countries as well as in the USA and Japan there were negative GDP growth rates in the last quarter of 2008.

In order to come out of the recession, Estonia should pursue gradual balancing of the economy. Rapid decrease in the domestic demand, improved foreign trade balance and adaptation of the labour market to new conditions have already contributed to this end. The openness of Estonia gives us opportunities, but makes us also more vulnerable when foreign demand for our products and services is decreasing. The exporting capacity and possibilities of the Estonian enterprises need to be increased. Productivity should also be increased, though it often involves additional costs.

Although increasing of the exporting capacity of Estonia is important, the exports of electric energy and shale oil have two sides — increased exports have caused an increase in the volume of oil shale ash by one third, other environmental pressure has increased, too.

Economical use of resources and reduction of the negative impact of waste on the environment serve as a precondition for sustainable development. In Estonia, the generation of municipal waste has grown by a quarter since 2001. Although the increase in consumption has brought along larger volumes of waste, it should be pointed out as a positive sign that growth in the generation of waste has been slower compared to the economic growth. With the volume of generated municipal waste per person — nearly 500 kg per year — Estonia remains a bit below the average of EU. Larger volumes of municipal waste per person are characteristic of Denmark, Ireland, Cyprus, Luxembourg and Malta.

In 2008 the impacts of economic recession did not concern the social area very much. Probably the majority of negative impacts will appear in 2009 and 2010. At the same time it can be presumed that economic difficulties that have reached the labour market already will, through an indirectly forced growth in efficiency, establish more sustainable basis for social areas in the longer perspective

Source: Statistics Estonia.

Bear population highest during past century

There are about 700 bears living in Estonian woods, the highest figure during the past one hundred years, the daily Eesti Paevaleht reported.
The number of bears has recently increased, mainly because of the growing wild hog and roe deer populations. Due to the increased numbers, hunters will be issued more bear shooting licenses this year than usual, the paper wrote.
The greatest number of bears (110) have been counted in the north-eastern East-Viru County, with 95 of the animals living in Jõgeva County, 90 in West-Viru County and 80 in Järva County. The bear population is the smallest in the south-eastern Võru County were only five bears are reported to be living.
The bear population changes slowly, because bears achieve maturity at four to five years of age and mate every other year.

Source: Estonian Review

Profit of Yliopiston Apteekki up 69 pct

The operating company of the Estonian Ülikooli Apteek pharmacy chain, Yliopiston Apteekki OÜ, posted a profit of 8.7 million kroons (EUR 560 000) last year, up 69% from 2007.
The company finds that the growth in profit was due to increased turnover and fall in the prices of purchased raw materials and components, it appears from the annual report of the company.
The sales proceeds of the chain totalled 144 million kroons last year, up by 20% against the year before.
During the year, Yliopiston Apteekki invested a total of 1.6 million kroons into material fixed assets, most of which was connected with the opening of new pharmacies and their installation.
The labour costs of the company totalled 11 million kroons last year and the two-member board were paid a remuneration of 1.2 million kroons.
The company had 12 pharmacies last year, and in addition to those Yliopioston Apteekki bought a subsidiary, Lihula Apteek OU, last year.
As of the end of 2008, the retained profit of the pharmacy chain was 21 million kroons. The board moved non-payment of dividends.
The owner of the chain is the Finnish pharmacy chain Yliopiston Apteekki OY.

Source: Estonian Review

SmartPost to sell its self-service post-office pack to Italy

When the state-owned Estonian Development Fund announced about a year ago that it will make its first seed investment into “self-service post office” solution provider SmartPost some people were truly amazed, the others kind of dissapointed.

They doubted if that qualifies of being “Estonian Nokia” everybody were looking for.

But now, a year later, SmartPost business idea kind of make sense. The start-up has established a country-wide parcel terminal network (30 terminals in different shopping centres) and offers a really handy parcel delivery service with good price.

Full-pack solution

That goes with a full-package-solution: hardware (parcel terminal), software, payment solution, network planning and operating system tools, client service and all. See the video!

CEO of SmartPost, Indrek Oolup says that the company is in negotiations to license the service-pack to a business client in Italy, that would then put up his own network there and start using an adapted business model.

It’s fascinating that Estonia is the second country in the world with a nation-wide automated parcel service network. DHL has something similar in Germany, but their terminals are located outdoors, making it inconvenient  to use the service in case of bad weather.

Estonia as a good reference

German solution is also much more expensive and less flexible, since, for example, their terminal is not modular and do not have credit card payment option. All that makes Estonia a good reference country for SmartPost in its mission for breakthrough in Western European markets.

Oolup confirms that SmartPost has done really well in Estonia and will soon obtain the market leader position in private parcel delivery sector.

Source: Estonian Technology Community (see video)

Lithuania to increase VAT to 21 pct

Lithuanian lawmakers gave final approval to an increase in the value added tax to 21 percent as the government copes with faltering tax revenue, Bloomberg writes.

Lawmakers voted 66-34, with 18 abstentions, to approve the change, according to Parliament’s Web site. The increase from 19 percent will come into force on Sept. 1.

Read more from BBN

Trade in machinery and equipment declined the most

According to Statistics Estonia, in May 2009 exports of goods at current prices were 31% less and imports 41% less than in the same month of the previous year. The decrease in trade was primarily caused by the steep decline in the exports and imports of machinery and equipment.

In May 2009, exports from Estonia totalled 8 billion kroons and imports to Estonia 8.5 billion kroons at current prices. The trade deficit amounted to 0.5 billion kroons. That was six times less than in May of the previous year amounting then to 2.9 billion kroons. Compared to May of the previous year, the trade in machinery and equipment decreased significantly — the relevant exports decreased by 0.9 and imports by 1.6 billion kroons. As a result of a bigger fall in imports compared to that of exports, trade surplus of 0.1 billion kroons was announced in the trade in machinery and equipment.

In May, the biggest share of exports was held by the commodities of machinery and equipment (accounting for 20% in Estonia’s total exports) as well as by mineral products (16%). The biggest decrease was in the sections of both machinery and equipment and in metals and products thereof. The decline in exports was announced among all commodity sections.

In May, the biggest share of imports was also held by machinery and equipment (18% of Estonia’s total imports) and by mineral products (18%). Compared to May of the previous year, the biggest decrease was reported in the imports of machinery and equipment (1.6 billion kroons), transport equipment (1.2 billion kroons) and metals and products thereof (1 billion kroons). The turnover of imports among all the commodity sections declined considerably.

Significant decline in Estonia’s foreign trade has been caused by the decreasing demand in internal and external markets in Estonia as well as in main partner countries. Steep decline in both exports and imports is characteristic of the whole Baltic region. According to Eurostat, during the four months of this year (January–April) a decline of more than a quarter was announced in the trade of Finland, Sweden, Latvia and Lithuania.

In May, the main countries of exports from Estonia were Finland (18% of total exports), Sweden and Latvia. The main commodities exported to Finland and Sweden were electrical machinery, and to Latvia — electric energy. A remarkable decrease in exports of goods from Estonia was announced to all main countries of destination. Exports increased notably only to Nigeria influenced by exported petroleum products.

The main countries from where goods were imported to Estonia in May were Finland (15% of total imports), Russia and Sweden. Commodities of electrical machinery and equipment were mostly imported from Finland, fuels from Russia and transport equipment from Sweden. Compared to May of the previous year, imports of goods from Germany and Finland declined the most.

Compared to April of this year, exports of goods from Estonia increased by 5% and imports to Estonia decreased by 10%. Foreign trade deficit decreased more than threefold compared to April. The increase in exports from Estonia was influenced by the increase in dispatches of mineral products (incl. fuels). The decline in imports was influenced by the decrease in the arrivals of products of the same commodity section.

See graphs here on Statistics Estonia website

Volume of problem loans may reach 9 pct this year

Jana Kask, Head of the Financial Sector Policy Division of Eesti Pank

In June, the corporate and household loan and leasing stock declined by 1.7 billion kroons, i.e., 0.6%. At end-June the volume of the loan and leasing portfolio amounted to 261 billion kroons, being nearly 2% smaller year-on-year. The drop in the loan volume this year has been mainly caused by the anticipated waning of corporate credit demand. The volume of loans issued to business services and trade companies has contracted more than average over the first six months of the year, by 10% and 8%, respectively.

The effect of decreasing Euribor on banks’ loan interest rates has abated in recent months. Average interest rates on housing loans and long-term corporate credit have slightly lowered, being 3.8% and 4.3%, respectively, in June.

The deposit volume of Estonian households and non-financial enterprises decreased by an approximate 800 million kroons, i.e., 0.7% in June. Household deposits exceeded 500 million kroons, partly owing to seasonal factors, but the increase was unable to offset the 1.3 billion drop in corporate deposits. The past half-year’s deposit volume has been on the level comparable to end-2008.

Similarly to May, growth in the volume of overdue loans in June continued at a slower pace. The share of loans overdue by more than 60 days in the loan portfolio rose from 5.5% in May to 5.8% in June. However, the volume of loans with lower defaults has declined. The current economic outlook allows presuming that the volume of problem loans will increase this year and it may reach to 9% of the banks loan portfolio as expected in Eesti Pank’s spring forecast.

The loan quality of enterprises active in the construction sector is worse than average: nearly a fifth of the loan portfolio faces repayment difficulties. The volume of housing loans overdue by more than 60 days is below 4% of the total housing loan volume.

The banks operating in Estonia suffered losses of 1.9 billion kroons in the second quarter of 2009. The unprofitability of foreign banks’ branches has hiked – the losses of the branches accounted for 30% of the total banking sector losses.

Loan write-downs, which amounted to some 2.3 billion kroons, had the strongest impact on the results of the banks. Loan write-downs made in the first half of the year make up 1.6% of the banks’ loan portfolio. According to the base scenario of Eesti Pank’s spring forecast, loan losses may increase to form up to 4% of the loan portfolio in 2009. In addition to larger loan losses, the banks’ profitability was adversely affected by net interest income, which was almost 25% smaller quarter-on-quarter.

The capitalisation of the banking sector continues to be high. Due to increased losses borne by banks, the aggregate capital adequacy ratio lowered by 0.5pp in June to 21.8%, exceeding the 10% minimum requirement by a sufficient margin.

The financial sector statistics and publication calendar are available on the web site of Eesti Pank at

Source: Bank of Estonia (see the graphs here)