General government deficit decreased last year

According to preliminary data of Statistics Estonia, in 2013 the Estonian general government deficit was 0.2% and the gross debt level was 10% of the Gross Domestic Product (GDP).

At the end of 2013, the total expenditures of the general government exceeded the revenues by 34 million euros, accounted as the Maastricht deficit criteria. By the end of the year, the central government deficit decreased from 123 million euros in 2012 to 14 million euros. The deficit of the local government sector increased almost three times over the year, amounting to 83 million euros. The budget of social security funds was also in surplus by 63 million euros, but it was tighter than in three previous years.

In 2013, both the levels of the general government’s total expenditures and revenues were 3% higher than a year before. Returns from taxes to the general government budget were 5% higher. For the second consecutive year, revenues from the personal and corporate income tax increased the most (15% in total). Property income underwent a significant fall (decrease of 16%), mostly due to a decrease in dividends. The foreign aid revenues lessened significantly over the year, but for this change it is important to notice the high level of income in 2012 – in 2013, the foreign aid revenues accounted for 405 million euros, 506 million in 2012 and 432 million euros in 2011. There was a considerable change in investments – in 2013, the general government sector spent 154 million euros less for investments than in 2012.

The consolidated debt of the general government (Maastricht debt) rose by 132.7 million euros, reaching 1.8 billion euros by the end of 2013. The local governments as well as the central government contributed to the growth of the debt level. The volume of the long-term securities issued by the central government decreased by 4% and the loan liabilities rose by 8%. The share of foreign debt in the central government’s loan liabilities was nearly 90%.

The Estonian involvement in the European temporary rescue mechanism, EFSF (European Financial Stability Facility) increased by 104 million euros in 2013. At the end of 2013, the liabilities towards the EFSF totalled 458 million euros, of which 80% went for the participation in the rescue package for Greece, 11% for Portugal and 9% for Ireland.

The overall debt level of the local governments grew by 12% compared to 2012. The volume of both short-term and long-term loans increased (15% in total), including the 12% of the loans financed by foreign capital. The volume of the securities other than shares increased slightly as well (7%). Similarly to 2012, social security funds did not contribute to the general government sector debt as at the end of 2013 either.

Surplus/deficit and debt level of the general government in Estonia, 2007–2013

Diagram: Surplus/deficit and debt level of the general government in Estonia, 2007–2013

In Estonia the general government sector comprises three sub-sectors: 1) central government (state budget units and extra-budgetary funds, foundations, legal persons in public law); 2) local governments (city and rural municipality governments with their subsidiary units, foundations); 3) social security funds (Health Insurance Fund, Unemployment Insurance Fund).

Eurostat is going to publish the data on the preliminary debt and deficit levels of the Member States on 23 April.

On 21 May 2013, the European Parliament and the Council adopted Regulation (EU) No 549/2013 on the European system of national and regional accounts in the European Union (ESA 2010). From 1 September 2014, all Member States will change the current methodology, ESA 95, to a new methodology, ESA 2010. Statistics Estonia will publish the usual data for the general government’s deficit and debt levels according to the new methodology on 23 September 2014.

Source: Statistics Estonia

Andrus Ansip’s last day as Europe’s longest-serving PM

March 26, 2014 was the final day of Andrus Ansip (57) as Prime Minister of Estonia. He was PM just short of nine years, specifically 8 years, 11 months and two weeks, wrote Postimees.

In an interview to Postimees, Ansip said that he was very grateful to the Estonian people for their confidence in him.

“Last week Turu-uuringute AS published its survey of public confidence in institutions. It showed that the government is trusted by 46% of the population. This is very high, especially compared to the rest of Europe where governments are usually supported by around 25% of the population,” he added.

Read more from BBN

10 pct more people use urban transport

According to Statistics Estonia, in 2013, the number of passengers served by Estonian transport enterprises and passenger turnover increased 8% and 2%, respectively. Freight volume increased 1% in tonnes, but fell 10% in tonne-kilometres.

In 2013, the number of passengers carried by Estonian transport enterprises by road, rail, sea and air transport amounted to 216 million. About 175.8 million of these passengers used urban transport (i.e. buses, trams and trolleybuses), which is a tenth more than in 2012. The number of passengers in other traffic amounted to 40.3 million, which is 5% less than the year earlier.

The number of passengers in domestic traffic (excl. urban transport) was 31.5 million and the average journey distance was 46 kilometres. The number of passengers in international traffic was 8.8 million, or approximately as much as in 2012, and the average journey distance was 341 kilometres.

The passenger traffic volume of transport enterprises was 5.2 billion passenger-kilometres. Domestic traffic amounted to 2.2 billion passenger-kilometres, remaining at the same level as in the previous year. International passenger traffic volume was 3 billion passenger-kilometres, which means a 3% growth compared to 2012.

In 2013, 78.7 million tonnes of goods were carried by Estonian transport enterprises. Most of these goods were carried by rail and road. 44.4 million tonnes of goods were transported in domestic traffic and 34.3 million tonnes in international traffic.

The freight turnover of transport enterprises decreased by a tenth compared to 2012, to 12.4 billion tonne-kilometres. Freight turnover decreased similarly in road, rail and sea transport.

The freight turnover was 2.1 billion tonne-kilometres in domestic transport and 10.3 billion tonne-kilometres in international transport. Compared to 2012, freight turnover increased by 7% in domestic transport and decreased by 13% in international transport. Thus, in 2013 international freight routes were shorter.

In 2013, the turnover of transport enterprises was 2 billion euros, which is 5% more than in 2012. Transportation services were sold for 1.9 billion euros. Transport enterprises received more than a half of the turnover (1.1 billion euros) from the carriage of goods and a fifth (424 million euros) from the carriage of passengers. Compared to 2012, the turnover from carriage of passengers fell by 3%, but the turnover from carriage of goods increased by 10%. In 2013, the subsidies for passenger transport totalled 120 million euros, which is a fifth more than the year earlier.

Carriage of passengers and goods by transport enterprises, 2013
Total Road
transport
..urban
transport
Rail
transport
Sea
transport
Air
transport
Passengers, millions 216.0 202.3 175.8 4.2 8.8 0.8
..international traffic 8.8 1.3 0.1 6.6 0.7
Passenger traffic volume, billion pkm 5.2 2.6 0.8 0.2 1.3 1.1
..international traffic 3.0 0.6 0.0 1.2 1.1
Freight, million tonnes 78.7 33.1 43.7 1.9 0.0
..international traffic 34.3 11.2 21.2 1.9 0.0
Freight turnover, billion tkm 12.4 6.5 4.7 1.2 0.0
..international traffic 10.3 5.1 4.0 1.2 0.0

– magnitude nil

Passenger traffic volume is the volume of work done in the transport of passengers. It is measured in passenger-kilometres (pkm). One passenger-kilometre is the transport of one person across a distance of one kilometre.

Freight turnover is the volume of work done in the transport of goods. It is measured in tonne-kilometres (tkm). One tonne-kilometre is the transport of one tonne of goods across a distance of one kilometre.

Source: Statistics Estonia

Companies take more loans and leases

Companies took 15% more in loans and leases in February this year than they did a year earlier. The increase was greater for long-term loans, more than half of which went to finance real estate and manufacturing companies.

Increased activity in the housing market was accompanied by an increase in housing loans. More than 15% more new loan contracts were signed in February than a year earlier, while the yearly growth in the turnover of housing loans reached 37%. As the volume of new loans was only slightly larger than the amounts repaid from earlier loans, the growth in the loan stock was modest. The housing loan portfolio was 1.2% larger at the end of February than it was a year ago.

The total stock of loans and leases issued to Estonian companies and households stood at 14.8 billion euros in February, which is 0.8% more than a year ago.

Borrowing has been facilitated by low interest costs. The six-month EURIBOR, which is the base rate for a majority of loans, remained at 0.4% in February, and the average interest margin on new housing loans was 2.1%. The average interest margin on long-term corporate loans was 2.7%, equalling the average for the past two years.

The volume of loans overdue for more than 60 days constituted less than 2% of the total portfolio in the end of February. As the quality of loan portfolio is improving, the banks continued to reduce the provisions made earlier to cover loan losses, and at the end of February provisions covered 75% of the long-term overdue loans.

The deposits of Estonian companies and households grew at an annual rate of 8% in February. Deposits from households and companies in the domestic non-financial sector increased during the month by a total of 128 million euros to reach 9.3 billion euros by the end of the month. The deposits of non-residents increased by 20 million euros in February to 2.3 billion euros, as before accounting for 20% of all the deposits in banks.

Source: Bank of Estonia

Author: Kadri Salumaa, Financial Stability Department of Eesti Pank

Eiki Nestor was elected the President of the Riigikogu

At the elections of the Board of the Riigikogu, Eiki Nestor was elected the President today. 54 members of the Riigikogu voted in his favour.

45 members of the Riigikogu voted in favour of Ene Ergma.

100 members of the Riigikogu took part in the elections. 1 ballot paper was invalid.

Eiki Nestor had been nominated by the Chairman of the Social Democratic Party Faction Sven Mikser. Ene Ergma had been nominated by the Chairman of the Pro Patria and Res Publica Union Faction Kaia Iva.

Eiki Nestor thanked the members of the Riigikogu for their support.

“I wish that the Riigikogu would be close to the people. If closeness on a first name basis seems inappropriate to some, a more polite form of address could be used, but I certainly don’t want the Riigikogu to be called ‘them’,” Nestor said.

The Riigikogu will now move on to electing its Vice-Presidents.

Source: The Riigikogu Press Service via Estonian Review

Electricity price decrease affects industries

According to Statistics Estonia, in February 2014, the producer price index of industrial output changed by -0.4% compared to January 2014 and by –0.9 % compared to February 2013.

In February, compared to the previous month, the producer price index was more than average influenced by the decrease in prices in electricity, gas, steam and air conditioning supply and in the manufacture of building materials as well as by the increase in prices in the manufacture of wood products.

Compared to February 2013, the producer price index was more than average influenced by the decrease in prices in electricity, gas, steam and air conditioning supply, in the manufacture of electronic equipment and in mining as well as by the increase in prices in the manufacture of wood products .

Change in the producer price index of industrial output by economic activity, February 2014
Economic activity according to EMTAK 2008 February 2014 – January 2014, % February 2014 – February 2013, %
TOTAL -0.4 -0.9
Manufacturing 0.4 0.2
Mining 2.7 -11.4
Electricity, gas, steam and air conditioning supply -9.3 -6.9
Water supply; sewerage; waste management and remediation activities 0.0 1.0

In February 2014, the export price index changed by 0.3% compared to January 2014 and by –2.3% compared to February 2013.

In February, compared to the previous month, the prices of oil products, timber and wood products increased more than average and the prices of electricity, building materials and food products decreased more than average.

In February 2014, the import price index changed by -0.6% compared to January 2014 and by –2.7% compared to February 2013.

In February, compared to the previous month, the prices of electricity, wearing apparel and electronic equipment decreased more than average and the prices of building materials, wood and wood products increased more than average.

Source: Statistics Estonia

The prices of apartments increased by 13 pct in a year

According to Statistics Estonia, the Dwelling Price Index increased by 10.7% in 2013 compared to the average of the previous year. Compared to 2012, the prices of apartments increased by 13.3% and the prices of houses by 4.1%.

The annual change of the Dwelling Price Index was 7.3% in 2012 and 8.5% in 2011.

In the 4th quarter of 2013 compared to the 4th quarter of 2012, the Dwelling Price Index changed by 15.6%, the prices of apartments increased by 20.2% and the prices of houses by 4.9%. The prices of apartments increased in all three areas under observation: by 21.4% in Tallinn, by 23% in areas bordering Tallinn and in Tartu and Pärnu cities and by 7.7% in the rest of Estonia.

In the 4th quarter compared to the 3rd quarter of 2013, the Dwelling Price Index increased by 2.6%, the prices of apartments increased by 3.7% and the prices of houses decreased by 0.1%. In the 4th quarter compared to the previous quarter, the price index of apartments increased by 3.9% in Tallinn, by 2.6% in areas bordering Tallinn and in Tartu and Pärnu cities and by 5.2% in the rest of Estonia.

The Dwelling Price Index expresses the changes in the transaction square metre prices of dwellings purchased by households. The Dwelling Price Indices are compiled for apartments and houses (including detached, semi-detached and terraced houses).

The Dwelling Price Index is published on the base 2010 = 100. The time series start from the 1st quarter of 2005. The annual index is calculated as the average of four quarters.

Dwelling Price Index, change over previous year, 2006–2013

Diagram: Dwelling Price Index, change over previous year

Source: Statistics Estonia