Exports grew on account of mineral products

According to Statistics Estonia, in January 2010 exports of goods grew by 11% and imports declined by 3% compared to the same month of 2009. The increase in exports was mainly influenced by the steep growth in the dispatches of oil products and fuel oils.

In January 2010, exports of goods from Estonia amounted to 8.1 billion kroons and imports to Estonia 8.6 billion kroons. Trade deficit accounted for 0.5 billion kroons in January, which was threefold less than in January of the previous year (1.6 billion kroons).

In exports among commodity sections the biggest share was held by mineral products (25% of Estonia’s total exports), followed by machinery and equipment (17%). Compared to January of the previous year exports of mineral products grew 2.5 times (by 1.2 billion kroons). Exports of wood and products thereof grew by 25%.

In imports among commodity sections the biggest share was also held by mineral products (26% of Estonia’s total imports), followed by machinery and equipment (19%). Compared to January of the previous year imports of machinery and equipment fell by 21% (or 0.4 billion kroons) and imports of transport equipment by 41% (or 0.3 billion kroons).

In Estonia’s exports the main countries of destination were Finland (18% of Estonia’s total exports), Sweden (14%) and Latvia (8%). The increase of exports to France, Nigeria and Costa Rica was mainly caused by the increase of dispatches of mineral products (motor spirits and fuel oils).

The main countries from where goods were imported to Estonia were Finland (16% of Estonia’s total imports), Russia (12%) and Latvia (11%). Compared to January of the previous year imports declined to some extent from Germany and Netherlands, but from the most of the main partner countries imports to Estonia increased.

Compared to December 2009, exports of goods declined by 6% and imports by 16%. In January compared to December, the decrease in foreign trade was caused mainly by the seasonality and is characteristic of the previous years as well.

According to Eurostat, in January 2010 the average increase of exports of the EU countries grew by 3% compared to January 2009.

Estonia’s foreign trade, 2009–2010 (million kroons)
  Month Exports Imports Balance
  January 7 266 8 821 -1 555
  February 7 817 8 747 -930
  March 8 346 9 770 -1 424
  April 7 736 9 324 -1 588
  May 8 161 8 505 -344
  June 9 548 9 934 -386
  July 8 246 9 414 -1 168
  August 8 114 9 286 -1 172
  September 9 434 10 172 -738
  October 8 968 9 726 -758
  November 9 109 10 385 -1 276
  December 8 599 10 258 -1 659
  January 8 062 8 582 -520

 Read more Statistics Estonia

Government deficit decreased

According to preliminary data of Statistics Estonia, in 2009 the Estonian general government sector deficit was 1.7% and gross debt level was 7.2% of Gross Domestic Product (GDP). In the 4th quarter the Estonian general government sector surplus was 4.3 billion kroons.

In 2009, the general government budget’s deficit remained within the limits set out in the Maastricht Treaty. At the end of the year the total expenditures of the general government sector budget exceeded the revenues by 3.7 billion kroons. For the first time the unemployment and health insurance funds ended in deficit: social security funds’ shortage of 1.5 billion kroons made up even 40% of the general government total deficit. Both, the central government’s and the local governments’ sector deficit decreased compared to 2008. In 2009, the central government deficit was 0.6% and the local governments’ sector deficit 0.5% of GDP.

The general government gross debt level still increased in 2009. By the end of the year the debt amounted to 15.5 billion kroons, growing by a third compared to the previous year. The central government’s debt level increased last year nearly twice compared to 2008, amounting up to 44% of the general government sector’s total debt. The total borrowing of the local governments sector increased only by 0.6 billion kroons in 2009, amounting to 8.7 billion kroons.

The 4th quarter 2009 compared to the 4th quarter 2008

In the 4th quarter of 2009, the general government’s total expenditures decreased by 17.5%. Expenditures decreased in all cost categories, only the expenses for social benefits increased by 0.5 billion kroons (6.2%). The general government’s wage costs were 1.2 billion kroons smaller.

The total income increased by 4.2 billion kroons (16.9%). The taxes on products and property income raised the total income — the receipts from the excises were high before the rise on the tax rate and the income from the dividends was received in the 4th quarter instead the usual 2nd quarter.

In the 4th quarter the increase of the general government gross debt level continued. While the domestic debt decreased by 0.7 billion kroons, the level of the general government’s foreign debt grew by 2.5 billion kroons in the last quarter. The growth of the foreign debt was mostly influenced by the outpayment of the large loan agreement taken for the co-financing the foreign aid programmes. Domestic debt decreased due to the return of the loans to the domestic banks. Both, the decrease of the domestic debt and the increase of the foreign debt, were mainly the result of the activities of the central government, the debt level of the local governments remained almost unchanged in the 4th quarter.

Eurostat publishes the debt and deficit levels of the Member States on 22 April.

Source: Statistics Estonia

Port of Tallinn expects 275 cruise ships this year

Estonia’s Port of Tallinn expects a total of 275 cruise ships with about 400 600 passengers to visit the port this year. Port of Tallinn public relations officer Sven Ratassep told BNS that 273 cruise ships with 400 000 passengers were expected to call at Tallinn City Harbor and two cruise ships with 600 passengers at Saaremaa Harbor.
Ratassepp said that the exact number of visitors could be quoted only at the end of the season, as a few more ships could come or fail to arrive during the season.
The first cruise ship will visit Tallinn on 24 April and the last on 20 September, Ratassepp said. He said that 254 cruise ship visits had been planned to City Harbour and eight visits to Saaremaa Harbour.
Last year a total of 307 cruise ships with 415 000 passengers called at Tallinn, 10% more than in the season of 2008. 302 cruise ships called at City Harbour and five cruise ships at Saaremaa Harbour. The longest ship that visited Tallinn last year was the Norwegian Jewel, of 294.13 meters, while the Emerald Princess brought 3 298 passengers to Tallinn on 17 July.

Source: Estonian Review

Danish furniture maker Flexa to relocate factory to Estonia

The Danish manufacturer of children’s furniture Flexa intends to shift production to Estonia and in connection with this, Flexa Eesti plans to increase its staff to up to 240 people.
In the course of the restructuring of the Flexa group, a plant will be relocated from Denmark to Estonia, board member of the Estonian operation Marianna Paas told BNS on Friday. “Furniture for children will be produced as before, it’s just that the part which used to be produced in Denmark will henceforth be produced in Estonia.”
Plans are for the Danish factory to continue working till the beginning of July and for the Estonian unit to fully take over its tasks in late summer. Flexa Eesti, which currently employs 210 people, plans to hire up to 30 new workers.
Paas said the last two years have been very difficult for the Estonian unit. “We have become considerably more cost-effective, but what we need to achieve in order to continue properly working is turnover,” she said.
Flexa Eesti made a loss of 89.3 million kroons (EUR 5.7 mln) in the business year ending in October 2008 after posting a profit of 23.8 million kroons the year before. Flexa Eesti AS is part of the Danish group Flexa Holding A/S.

Source: Estonian Review

Traders interested in Estlink’s electricity

The Estonian main grid company Elering believes that traders’ interest in the Estlink price area is growing, as the share of the capacity of Estlink 1 going into the disposal of the market is considerably greater than originally planned.
The Nordic countries’ Nord Pool Spot (NPS) Monday said that the owners of Estlink 1 had promised to give into the disposal of the market between Finland and Estonia a capacity of 197.3 megawatts and between Estonia and Finland 122.4 megawatts.
“While it was initially believed that 50 megawatts would be given into the disposal of the market, the NPS information surpasses all our preliminary expectations,” CEO of Elering Taavi Veskimägi said.
He said that the announced capacity would increase the interest of the Nordic countries’ traders in the Estlink price area and the interest of third countries traders in sales to the Nordic market via the Estonian price area.
“Besides, in the light of the framework agreement between Elering and Fingrid, this information can be seen so that we are now taking a long step closer to making the Estlink 2 investment decision, because giving additional capacity will animate the market and prove a positive outlook for the opening of the market,” Veskimägi said.
NPS said on Monday that the two biggest owners of the direct current cable, Eesti Energia and Latvenergo, would give a large proportion of their capacity of the cable to the disposal of the electricity market, Elering said.
The final decision to be made by one owner of the cable may increase the capacity to be given to the market. According to earlier information, it is necessary for the functioning of the market that owners of the 350-megawatt Estlink 1 should give to the disposal of the market 155 megawatts southbound and 140 megawatts northbound.
The owners of Estlink 1 are Eesti Energia with 29.9%, and Latvenergo and Lietuvos Energija both 25% with the remaining share of 10.1% divided between Pohjolan Voima and Helsingin Energia.

Source: Estonian Review

AirBaltic to open its base in Tallinn

The Latvian state-owned airline airBaltic will open its base in Tallinn on 1 June in order to support its growth in Tallinn Airport. AirBaltic will publish more information about its future plans on 31 March, when Tallinn-Tampere direct flights will be launched, the company said.
“The Estonian market is considerably underserved and needs more flights. AirBaltic has made its first strategic move by adding seven direct flights from Estonia. We will increase our presence in Tallinn Airport with the opening of an airBaltic base,” Bertold Flick, CEO and President of airBaltic, said in a comment.
Tallinn is the first airBaltic base to be opened this year. Starting in June, airBaltic will have bases in all the three Baltic capitals. AirBaltic has seven direct flights from Tallinn and one direct flight from Tartu.

Source: Estonian Review

Estonia 25th on world IT competitiveness list

According to the Information Technology Report of the World Economic Forum published on Thursday Estonia fell seven places, landing in 25th place for its IT capability.
In the years 2009-2010 the position of Estonia has fallen considerably, but it is still far above the other new member countries of the European Union, said the Development Fund, a partner of the World Economic Forum in Estonia. In this ranking Slovenia is only in the 31st position, with Latvia and Lithuania ranking respectively 41st and 52nd.
In the post-crisis world Sweden has risen to become the IT leader ahead of Singapore and Denmark. The USA fell to the 5th place and Finland is in the 6th place for the second year running. Countries that have made some of the biggest development leaps are China and India, having risen by nine to ten places but still behind Estonia.
The leaders of the IT list are characterised by balance between the three main factors ensuring development of information technology: existence of an environment favouring IT, public institutions’, companies’ and individuals’ readiness to use IT, and actual IT use.
In terms of some indicators Estonia is still among the leaders, such as for the availability of digital services (first place), IT legislation (third place) and IT in government institutions (third place).
Estonia’s fall has been caused by some indicators that had so far been Estonia’s trump cards such as spread of the internet, the price of mobile communication and the number of its users as well as public sector internet services becoming generally accepted. In order to stand out it is necessary to have more than just infrastructure and passive readiness to use IT, the Development Fund said.
The Global Information Technology Report 2009-2010 of the World Economic Forum covers 133 countries and is the most extensive analysis of the influence of IT on the development and competitiveness of countries.

Source: Estonian Review

Estonia fulfilled Maastricht budget criteria

Statistics Estonia confirmed that Estonia’s budget deficit last year was 1.7% of the GDP, significantly lower than the number dictated by the Maastricht criteria for joining the euro zone. The Finance Ministry already announced at the beginning of March that they estimated the budget deficit to be 1.7% of the GDP, but today Statistics Estonia confirmed the number.

Based on the number announced today, the Maastricht criteria are considered to be officially fulfilled. In order to join the euro zone, the budget deficit must be below 3%.
According to the data of the Finance Ministry, 1.7% of the GDP equals 3.7 billion kroons. The unemployment office and health insurance fund ended the year in deficit for the first time: the 1.5 billion kroon deficit in the social security fund made up 40% of the entire government deficit.

Compared with 2008, the deficits of both the central government and local municipal government sectors decreased. The budget deficit of the central government sector was 0.6% and the budget deficit of the municipal government sector was 0.5% of GDP.
Estonia was already below the Maastricht inflation criteria in November of last year, and the ministry confirms that this situation will continue this year and next year as well. Estonia has fulfilled the criteria for government sector debt and currency exchange since the creation of the euro zone. By the end of 2009 government sector debt reached 5.5 billion kroons or 7.2% of the GDP. Debt grew by one third compared to 2008.
Eurostat will publish data on the debt and deficit information of member states on 22 April.

Future plan for adopting the euro:

  • In March and April the European Commission and the European Central Bank will conduct a regular assessment to ascertain Estonia’s readiness to join the euro zone.
  • In May, the reports of the Commission and the Central Bank will be published.
  • On 8 June the Council of Economics and Finance Ministers of the European Union (ECOFIN) will meet to discuss Estonia’s compliance with the euro criteria based on the assessments of the European Commission and the European Central Bank.
  • On 18 June the proposal of the ECOFIN will be discussed in the European Council.
  • On 6 July ECOFIN should make the final decision regarding Estonia’s accession to the euro area and confirm the exchange rate (the government confirms that it will remain 15.6466).
  • Estonia hopes to join the euro zone on 1 January 2011.

    Source: estonia.eu