2013 was a successful year for Estonian industry

According to the preliminary data of Statistics Estonia, in 2013 the production of industrial enterprises grew 3% compared to the previous year. Both export sales and the sales on the domestic market increased.

In the course of 2013 manufacturing production showed a moderate growth compared to the same month of the previous year. The exceptions were August, when the production remained on the level of the previous year, and September and December, when the production in manufacturing fell.

In 2013, the production exceeded the volume of the previous year in more than half of the branches of industry. The growth in the production of manufacturing was positively influenced by the three branches holding bigger shares – the manufacture of electronic products and the manufacture of wood (in both branches the production increased 6% compared to 2012) and the manufacture of food products (where the production grew 3%). The growth in the production of manufacturing was negatively influenced by the fall in the manufacture of metal products, electrical equipment and motor vehicles.

In 2013, the production in manufacturing grew mainly due to the increase in exports. More than 70% of the whole production of manufacturing was sold on the external market. Export sales grew 5% compared to 2012. The demand on the domestic market was slightly lower – in 2013 domestic sales increased by 4% compared to the previous year.

In December 2013, the production of industry decreased 6% compared to December 2012; the production of manufacturing fell 4%. In December compared to December 2012, the production of electricity decreased by 23% and the production of heat by 28%. The decline in electricity production was mainly caused by the partial replacement of own production with imports.

In December 2013 compared to November, the seasonally adjusted industrial production fell 6%; the production of manufacturing fell 2% during the month.

Volume index trends of production in manufacturing in the European Union countries, January 2005 – November 2013 (2010 = 100)

Volume index trends of production in manufacturing in the European Union countries

 

Read more from Statistics Estonia

Retail sales grew in December

According to Statistics Estonia, in December 2013 compared to December 2012, the retail sales of goods of retail trade enterprises increased 5% at constant prices.

In December 2013, the retail sales of goods of retail trade enterprises were 448.3 million euros, which was almost 340 euros per inhabitant. The retail sales in stores selling manufactured goods increased 12% compared to December 2012. The sales increased in most economic activities. Only the retail sales in non-specialized stores selling predominantly industrial goods (i.e. department stores) were 2% smaller than in December of the previous year. The retail sales of second-hand goods in stores and non-store retail sale (stalls, markets, direct sale) increased the most – 81% compared to the same period of the previous year. Compared with previous months, the retail sales growth of this economic activity accelerated, mainly due to the very low reference base of December 2012. The sales increase in second-hand goods stores does not significantly influence the retail sales of goods of retail trade enterprises, because the share of this economic activity is very small – 1.5% in December 2013. A higher than average increase occurred in retail sales via mail order or the Internet (26% growth) and in stores selling household goods and appliances, hardware and building materials (21% growth). In December, the retail sales increased also in other specialized stores, such as stores selling computers and their accessories, photography supplies, books, sports equipment, games and toys, etc. (10% growth), in stores selling textiles, clothing and footwear (8% growth) and in stores selling pharmaceutical goods and cosmetics (3% growth).

The retail sales in grocery stores have been rather stable during the last months. The retail sales in grocery stores increased 3% in December compared to the same month of 2012.

The retail sales of automotive fuel decreased 10% at constant prices compared to December 2012; the decline was faster than in the previous month. The faster decline in the retail sales of automotive fuel was partly influenced by the high reference base of December 2012 and deceleration in the price decrease of automotive fuel. In November 2013 the annual price decrease of automotive fuel was 4.7%, whereas in December it was 1.8%.

In December compared to November 2013, the retail sales in retail trade enterprises increased almost by a fifth at constant prices. This is a usual rise in December, when Christmas and New Year’s sales take place.

In December, the turnover of retail trade enterprises was 518.2 million euros, out of which the retail sales of goods accounted for 87%. Compared to December 2012, the turnover increased by 3% at current prices. Compared to the previous month, this indicator increased 15%.

According to preliminary data, the retail sales of retail trade enterprises were 4.6 billion euros in 2013. Compared to 2012 the retail sales increased 5% at constant prices.

Source: Statistics Estonia

Changes in bank payment times

From the start of February the commercial banks will settle payments between themselves using a pan-European retail system. At the end of the working day on 31 January in consequence, Eesti Pank will close its retail payments system ESTA, where around one fifth of the payments made in Estonia are settled.

As interbank payments within Estonia will now move through the pan-European retail payments system STEP2, the working hours of that system will have an impact. The current ten settlement cycles will be reduced to five cycles, meaning that rather than the current hour or hour and a half, it will take around 3-5 hours for money to be transferred. The conditions for each bank depend on whether the bank is connected to the system directly or through another bank.

Bank clients will be need to be aware that if money has to reach its destination in another bank on the same working day, the payment will need to be initiated in Swedbank, SEB or Danske Bank by 16.30 at the latest, and in Nordea by 15.30 at the latest. For some banks the final deadline for making payments could be 15.00. Further information and answers to questions can also be obtained from the banks. If a payment is started later, it will reach the payee on the next working day, at around 10.00. Payments currently reach their destination on the same working day if they are made before 17.00.

Payments within banks will be made in the same way as they have been up to now. Payments within one bank will be made around the clock, even at weekends and holidays.

ESTA

Eesti Pank has settled interbank retail payments within the country since 1992 and the current retail payment system started operations in 2005. The speed and frequency of the payments has been the same since October 2006, with payments being made ten times a day between 08.00 and 18.00. During its eight years and four months of operation, the ESTA retail payments system has settled over 200 million interbank payments with a total value of 232 billion euros, equivalent to 95,000 payments worth 110 million euros each day.

Eesti Pank started preparing in 2012 for the change to SEPA so that the settlement systems for interbank retail payments could be brought into line with the new requirements. The results of the tendering process allowed Eesti Pank to offer the commercial banks improved payment conditions and lower prices, which were down one third on current prices at two euro cents per payment, and to develop a SEPA direct debit service. The prices of the retail payments systems operating in Europe were still cheaper though, and the parent banks of many of the banks operating in Estonia were already connected to the pan-European STEP2 settlement system, so the banks did not choose the solution offered by Eesti Pank. Only a few European central banks, such as the German, Italian and Austrian central banks, provide an interbank retail settlement service.

The pan-European STEP2 retail payments system

The STEP2 system is managed by EBA Clearing, a private company which was founded in 1998 and is now owned by 63 European and international banks. EBA Clearing is responsible for the reliability of the system and for keeping it working without interruption. The responsibility for oversight falls to the European Central Bank, which makes sure the system is working efficiently and that risks have been minimised.

Eesti Pank will continue to operate the Estonian part of TARGET2, the pan-European system for express interbank payments. The express system can be used for very large payments that reach their destination within around thirty minutes.

Source: Bank of Estonia

New party founded in Estonia

At the initiative of MEP Kristiina Ojuland the foundation meeting of Estonia’s new party, newly named Erakond Uhtne Eesti (Unitary Estonia), took place on Thursday in Kaberneeme, Harju County, spokespeople for the party said.

A total of 27 active people from different parts of Estonia were present and they were all joined by a wish to change today’s situation in Estonia where the gap between the authority and the people is deepening.

“Our choice of name is supported by the fact that the production Uhtne Eesti Suurkogu by theater NO99 that took place in 2010 was the first to draw attention to the more important areas that need changing in our country,” Ojuland said when the final version of the name became clear.

“To exactly those topics from which our party Unitary Estonia originates when improving the Estonian society. The more we looked with our followers at the connections of that name, the more it became clear that we couldn’t find a name that carries our principles more,” she said.

At the foundation meeting a temporary 10-member board was chosen for the new party, as well as the program committee and its leader. Further meetings will take place in work groups according to the program’s main topics.

“Everybody who shares the principles of Unitary Estonia, which we will introduce in detail after we the party’s program has been approved, is welcome to join the founders,” Ojuland said.

Source: Estonian Review / BNS

Eesti Post will buy 25 mln euros worth of vans

Estonian state-owned postal company Eesti Post announced that increased business volumes and fast growth in the Baltic States led it to hold a 2.5 million euro procurement in Estonia, Latvia and Lithuania to buy vans, Äripäev reports.

The company intends to buy 185 vehicles over two years, 143 of which for Estonia, 20 for Latvia and 22 for Lithuania.

Read more from BBN

Amendments to the law coming into force this year

The Ministry of Finance reminds everybody on the amendments to the legislative acts that enter into force this year.
This year’s budget expenditure will be 8.06 billion euros and the expected revenue will be 8.02 billion euros. The increase in state revenue is five percent, soon to reach all spheres of life. The budget was prepared conservatively, as indicated by the 0.7 percent structural surplus measuring the substantive coping with expenditure.
An amendment to the Taxation Act enters into force, which reduces the limitation period for enforcement of compulsory tax levied pursuant to returns as well as administrative acts (e.g. orders) from seven years to five years. The practice has shown that the percentage of collection of tax debts older than five years is extremely low.
Amendments to the Income Tax Act enter into force, which allow equal taxation of real estate income of contractual investment funds established either in Estonia or in any foreign country. From now on also the Estonian-sourced real estate income of Estonian contractual investment funds will be taxed.  The income taxed at the fund level will no longer be taxed at the level of the unit-holders. These amendments only apply to real estate income and not to pension funds or their unit-holders.
EU 2014-2020 Structural Assistance Act sets out the national allocation of tasks from the Structural Funds, allows the ministries to impose conditions for granting aid, specifications regarding the procedure of granting aid, supervision and settling disputes.
Amendments to the Public Procurement Act allow to nullify procurement contracts unlawfully entered into under the framework contract. The term of submitting the request for review of public procurement has been changed from seven working days to ten calendar days. From now on, the disputes related to state secrets will be submitted to administrative court.
As agreed in the State Budget Strategy in spring 2012, the excise duty on tobacco increases by 6% and on alcohol by 5%.
As of February 1, 2014, a bailiff will have the right under an administrative regulation and at the request of a tax authority to order detention in accordance with the procedure of preliminary detention. 
As of April 1, 2014, the court and prosecution claims as well as the administration of state fees collected by courts will be transferred to the Tax and Customs Board’s Taxable Persons Register database.  This means that the claims of several state authorities will be gathered into a single register providing individuals a better overview of their financial obligations to the state. The court and prosecution claims will have a separate reference number. In cases stipulated by law, the prepayment account of an individual will be used for settling the claim in the extent of the sum calculated.
Amendments to the Value Added Tax Act allow extended options of providing proofs of tax free purchases, the place of taxation of electronic communication services and electronic services will change and quantitative restriction will be set to coffee (500 g) and tea (100 g) sent without VAT from a country outside EU. The amendments will enter into force from March 1, 2014.
Additional exemption rate of pensions increases.  As of January 1, 2014, the additional tax-exempt income of pensions is 2520 euros per year, which is 210 euros per month. This is 18 euros more than before.
Amendments to the Insurance Act and the Investment Funds Act enter into force. These will change the insurers’ management requirements based on EU-wide rules, allow insurers, in addition to being an insurer’s agent, operate as an agent of credit institution, management company or investment firm, raise the insurance amounts of insurance brokers’ liability insurance contracts.
Amendments to the Credit Institutions Act and related acts enter into force. The amendments based on EU legislation set new obligations to banks, investment firms and hedge fund managers. Banks and investment firms will have to maintain more quality capital and create additional risk buffers. Additional requirements are also set for management bodies. Hedge fund managers will be monitored more closely. The act increases financial stability and allows for increased reliability and transparency in financial sector.
The validity period of the limits of pension fund management fee will be extended. The act of amendment of the Investment Fund Act, the Funded Pensions Act and the Social Tax Act extends the validity period of the limits of pension fund management fees of mandatory funded pension (in case of conservative funds 1.2% and the rest 2%) by five years. The act also amends the rules of succession of units of mandatory pension fund. Now, the units can also transfer to legal persons, in addition to natural persons. The regulation of estate bankruptcy has also been amended. If the estate is declared bankrupt the creditors can satisfy their claims out of the units of mandatory pension fund.
The acts of amendment of the Financial Supervision Authority Act and the Investment Funds Act improve the financial supervision over financial conglomerates, facilitate the offering of units of other member states’ investment funds in Estonia, and give the financial supervision authority a more comprehensive role in promoting financial knowledge among the population.
Source: Estonian Ministry of Finance

The production of cereals decreased in 2013

According to the preliminary data of Statistics Estonia, the cereal production was 970,800 tons in 2013, which is 2% less than the year earlier.

The total cereal production included 406,300 tons of wheat, 439,000 tons of barley and 21,700 tons of rye. The average yield per hectare was 3,121 kilograms of cereals, whereas the average yield was 3,258 kilograms for wheat, 3,302 kilograms for barley and 1,885 kilograms for rye.

In winter 2012/2013, the conditions for winter crops were unfavourable. Therefore, in spring, summer crops were sown on some of the fields where winter crops had perished. The sown area of cereals was 311,000 hectares in 2013, 7% more than in the previous year. The sown area of wheat was 124,700 hectares, which was the same as in 2012. The sown area of barley increased by 22% and amounted to 133,000 hectares in 2013. The sown area of rye was 11,500 hectares, which is one third less compared to the previous year.

The production of legumes was 32,800 tons, which is two and a half times more than the year before, and the average yield was 2,312 kilograms per hectare. Legumes were sown on 14,200 hectares, which is almost a third more than the year before and also the largest sown area of legumes during the last three decades.

According to preliminary data, the yield of rape and turnip rape seed was 169,700 tons. In 2013, rape and turnip rape were sown on 85,600 hectares. The average yield was 1,984 kilograms of rape and turnip rape seed per hectare.

The production of potatoes amounted to 125,100 tons, which is 10% less compared to the year earlier. The sown area of potatoes has been less than 10,000 hectares since 2008 – it was 6,600 hectares in 2013. The average yield of potatoes was 18,875 kilograms per hectare.

In autumn 2013, 67,000 hectares of winter wheat, 11,800 hectares of rye and 4,900 hectares of triticale were sown for harvesting in 2014.

Source: Statistics Estonia