Recession did not influence poverty

According to Statistics Estonia, in 2008 the growth of wages and salaries slowed down but the increased pensions and governmental benefits helped to maintain incomes. Therefore the relative poverty remained on the level of 2007.

In 2008, 19.7% of the Estonian population lived in relative poverty, which is approximately as much as in 2007 when the rate was 19.5%. Social transfers (governmental benefits and pensions) helped to maintain incomes, as they were not included in income the relative poverty rate was even 37.5% in 2008, (in 2007 — 36.3%)

In 2008, a person was considered to be in at-risk-of-poverty if his/her monthly equalised disposable income was below 4,858 kroons. The at-risk-of-poverty threshold rose by 518 kroons compared to the previous year. Also in 2008 the difference in income between the poorest and richest fifth of the population stayed fivefold.

The elderly is rather the age group that still lives in poverty. In 2008, every third person aged 65 and older and 14% of persons aged 25–49 lived in relative poverty. Compared to previous years it can be noticed that the number of younger people living in relative poverty is increasing, and the number of persons aged 65 and older living in poverty is decreasing.  The main reason is more stable income of persons in pension age compared with other age groups.

By type of household the at-risk-of-poverty rate has increased the most during the year 7 percentage points in households with three and more children, and has decreased 8 percentage points in households with a single person aged 65 and over. In other households there were not so large variations in the at-risk-of-poverty rate.

Falling into the risk-of-poverty is related to the education level. In 2008, the at-risk-of-poverty rate of persons with basic or lower education (below upper secondary education) was 34%, which was more than four times higher than of persons with higher education (tertiary education) (8%).In recent years the trend shows that the relative poverty rate of less educated persons is increasing, while that of the persons with higher education is decreasing. Thus, a good education is an important presumption for the prevention of poverty.

The estimations are based on the social survey, which has been conducted by Statistics Estonia since 2004. In 2009, over 4,900 households participated in the survey. The survey collects data about yearly income, which is the reason why the survey of 2009 asks for data about income in 2008. The yearly income is necessary for calculating the indicators of poverty and inequality. Social surveys are conducted on the basis of harmonised methodology in all the European Union countries under the title of EU-SILC.

At-risk-of-poverty rate is the share of persons with an equalised yearly disposable income lower than the at-risk-of-poverty threshold. At-risk-of-poverty threshold is 60% of the median equalised yearly disposable income of household members. Equalised disposable income is the total household income, which is divided by the sum of equivalence scales of all household members.

Below upper secondary education — basic or lower educationUpper secondary education — professional secondary education after basic education, vocational education together with upper secondary education, professional secondary education after basic education, general secondary education or professional secondary education after secondary education.

Tertiary education — professional secondary education after secondary education, professional higher education, applied higher education, professional higher education, diploma study, bachelor’s, master’s or doctoral degree.

See a table At-risk-of-poverty rate of people aged 18 or over by educational level, 2005–2008

Source: Statistics Estonia


Exports grew on account of fuels

According to Statistics Estonia, in April 2010 exports of goods grew by 37% and imports 18% compared to April of the previous year. Exports increased in the dispatches of all commodity sections, especially fuels.

In April exports of goods from Estonia amounted to 10.6 billion kroons and imports to Estonia 11 billion kroons. Exports increased by 2.9 billion kroons and imports 1.7 billion kroons compared to April 2009. The trade deficit amounted to 0.4 billion kroons, which was over four times more than in April of the previous year.

In April, the biggest share in Estonia’s total exports was held by the commodities of machinery and equipment (nearly a fifth of Estonia’s total exports) and mineral products (15%). Compared to April of the previous year, the biggest increase was in exports of mineral products (incl. motor spirits, fuel oils and electrical energy) — 0.9 billion kroons. The turnover in exports of metals and products thereof increased by 60% or 0.4 billion kroons.

In April the biggest share in imports was also held by machinery and equipment (20% of Estonia’s total imports) and mineral products (16%). In April the turnover of imports increased among all main commodity sections compared to April of the previous year. The biggest increase was announced in the arrivals of metals and products thereof and machinery and equipment (by 0.4 billion kroons both).

The main countries of destination were Finland (18% of Estonia’s total exports), Sweden (14%), Russia and Latvia.  Electrical machinery and equipment accounted for the biggest share of exports to Finland and Sweden, vehicles and accessories thereof to Latvia and paints and lacquers to Russia. Compared to April of the previous year, exports to Sweden and Finland increased the most (by 0.5 billion kroons both).

The main countries from where goods were imported to Estonia were Finland (16% of Estonia’s total imports), Latvia (13%) and Germany. Electrical machinery accounted for the biggest share of imports from Finland, fuels from Latvia and iron and steel from Germany.  The biggest increase was announced in imports from Finland, Latvia, Germany and Sweden (0.4 billion kroons from each). At the same period imports from Lithuania decreased by 0.4 billion kroons.

According to Eurostat data, exports of the European Union (EU 27) countries increased by 18% compared to April of the previous year.

In April compared to March, exports of Estonia increased by 8%, but imports to Estonia decreased by 12%.

Estonia’s foreign trade, January–April, 2009–2010
Month Exports, mEEK Imports, mEEK Balance, mEEK
2009 2010 Change, % 2009 2010  % 2009 2010
January 7 269 8 094 11 8 830 8 503 -4 -1 562 -409
February 7 817 9 785 25 8 755 9 599 10 -939 186
March 8 348 9 833 18 9 788 12 497 28 -1 440 -2 664
April 7 736 10 630 37 9 330 10 987 18 -1 594 -357


Read more from Statistics Estonia

Window maker Glaskek is facing bankruptcy

Window maker Glaskek is facing bankruptcy now that its large creditor Swedbank, the largest bank in Estonia, has lost faith in the restructuring of the company and on June 22 filed the company for bankruptcy, writes

Lars Nilsson who heads Swedbank’s Baltic unit that manages high business risks said that Swedbank had been actively involved in looking for solutions with Glaskek since last autumn.

Nilsson said that the bank and Glaskek had been jointly analysing the possibilities to restructure the company, but after an in-depth study, the bank no longer sees a possibility to restructure Glaskek into a viable business by restructuring.

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