One-third of Estonia’s exports are of foreign origin

The share of goods brought into Estonia for processing or storage has been increasing in Estonia’s total exports, with subcontracting and re-export making up an estimated one-third of the country’s total exports in 2011. According to figures by Statistics Estonia, the sales of goods exported from Estonia to foreign markets grew by more than one-third, or respectively by 35% and 37%, in 2010 and 2011.

In 2011, exports of goods accounted for 75% of Estonia’s gross domestic product (GDP), the highest ratio for any separate year so far. “This shows the high dependence of the Estonian economy on exports and also that Estonia’s exports and consequently the economy on the whole are influenced by the situation of the economies of the countries that are destinations for the exports,” Riina Kerner, analyst with Statistics Estonia, said in the blog of the national statistical office.

In 2011 Estonia’s total exports grew 37%, while the rate of growth of re-export was 57% — from 1.66 billion euros in 2010 to 2.61 billion euros in 2011. “For instance, tractors arrive in Estonia from Britain, they are stored at warehouses here and exported to Russia when a buyer has been found. This kind of trade is reflected in Estonia’s export and import volumes alike. If in 2001 the share of such products in Estonia’s total exports was only 5%, then in 2011 it was already 22%,” Kerner wrote.

Export of subcontracting also has grown faster than total export, or by 48% from 1.07 billion euros in 2010 to 1.58 billion euros in 2011. In 2011 goods brought into Estonia only for subcontracting made up 13% of Estonia’s total exports. Ten years ago, in 2001, they made up 37%, meaning that the share of subcontracting goods in Estonia’s exports has decreased in the past decade, said Kerner.

In subcontracting, goods are processed under contract, which happens when motor fuel is processed or equipment installed in vans to turn them into ambulance vehicles, for instance. Re-export is the dispatching of imported goods from Estonia without giving them substantial value-added, that is, goods arriving from other countries are just stored. Data on the re-export of goods is estimated data because no national methodology for calculating re-export has been developed. Services and transit are not included in Estonia’s total exports.

Source: Estonian Review

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