Per capita GDP of counties becoming more even

According to Statistics Estonia, 64% of the gross value added of the Estonian gross domestic product (GDP) in 2017 was created in Harju county. However, the differences between counties as regards GDP per capita are getting smaller.

In 2017, Estonia’s GDP reached 24 billion euros at current prices. Harju county’s contribution amounted to 15 billion euros, 13 billion euros of which came from Tallinn. Harju county was followed by Tartu county and Ida-Viru county, the shares of which in Estonia’s GDP stood at 11% and 6%, respectively. Hiiu and Põlva counties had the smallest shares in 2017 – both contributed less than 1% to the Estonian GDP.

Over 70% of the gross value added of Estonia was created in the service sector in 2017. The influence of the cities of Tallinn and Tartu, in particular, resulted in Harju county and Tartu county having the largest share of services – 76% and 70%, respectively. Contrary to the previous trend, the share of the service sector in value added declined slightly in all counties except in Lääne county. Most notable drops in the share of the sector took place in Põlva, Järva and Jõgeva counties.

Industry and construction accounted for 28% of the gross value added of Estonia in 2017. As the share of the service sector has declined, the share of industry and construction in the value added of multiple counties has increased slightly over the past year. The sector accounts for the largest share in value added in Ida-Viru county (51%), and for the smallest share in Harju (23%), Põlva (26%) and Tartu (27%) counties. While the reason for the small share in Harju and Tartu counties is a large service sector, Põlva county has a large agricultural sector.

The agricultural sector accounted for 3% of the gross value added of Estonia in 2017. This sector had the largest share in Jõgeva county (18%), followed by Viljandi (16%) and Põlva (13%) counties. While in general, the share of the sector in the value added of counties has shown a downward trend, it saw some increase in 2017 following a weak 2016. This was most notable in counties where the sector has a larger share in value added.

In 2017, GDP per capita was 17,943 euros, which is 1,464 euros more than a year earlier. GDP per capita was highest in Harju county – 144% of the Estonian average. Harju county was followed by Tartu and Pärnu counties, where GDP per capita amounted to, respectively, 92% and 69% of the Estonian average. The lowest GDP per capita was recorded in Põlva county – 42% of the Estonian average. In recent years, the GDP per capita of many counties has been approaching the Estonian average. This is most notable in Lääne, Saare and Valga counties. The gap between Harju county and the Estonian average has also narrowed. This means that the per capita GDP of the rest of Estonia is getting closer to Harju county.

Read more from Statistics Estonia

The quantity of pesticides sold decreased by one-sixth last year

According to Statistics Estonia, 706 tonnes of pesticides (by active substance) were placed on the market in 2017 in Estonia, which is 15% less than the year before.

Biological and mechanical plant protection products accounted for 0.1% of the total quantity of pesticides sold in 2017, the rest were chemical plant protection products.

Of the quantity of sold pesticides, 66% were herbicides, 17% were fungicides, 13% were growth regulators and 4% were insecticides. Compared to 2016, the quantity of sold herbicides decreased and the quantity of fungicides increased. The quantity of insecticides placed on the marked has also slightly decreased in the last couple of years.

Compared to 2012, the quantities of sold plant protection products have increased by a quarter in the last five years. In 2017, three times more growth regulators and almost double the quantity of fungicides were sold compared to five years prior. At the same time, the quantities of herbicides and insecticides have remained roughly at the same level.

Pesticides are used not only for agricultural purposes, but also in forestry, wood processing industry, road and railway maintenance, sports grounds, playgrounds and parks. Everyone can buy certain plant protection products for use in the garden.

Read more from Statistics Estonia

Expenditure on research and development increased last year

According to Statistics Estonia, in 2017, the expenditure on research and development (R&D) in Estonia amounted to 304.3 million euros, which is 13% more than in 2016.

Estonia’s research and development expenditure has been under sharp focus in recent years. One of the reasons for this is the competitiveness goal in “Estonia 2020” to increase the share of R&D expenditure to 3% of gross domestic product (GDP) by 2020. The results of previous years have not reached the target threshold, but there is still time for that.

In 2016, R&D expenditure decreased compared to the previous year, but the 2017 results are much more positive – total expenditure on research and development increased by 13% compared to 2016. The growth in the non-profit institutional sector was 23% and in the business enterprise sector 3%.

In international comparison, the R&D intensity index – the ratio of expenditure on R&D to GDP – is a decisive indicator. In 2017, Estonia’s R&D intensity index was 1.29. Despite the increase in total R&D expenditure, the R&D intensity index did not improve significantly. One reason for this is that Statistics Estonia adjusted upwards the gross domestic product for 2014–2016. On the basis of preliminary results, in international comparison, Estonia retained its intermediate position among the EU Member States, which is a better result compared to Latvia and Lithuania, but still significantly behind Finland and Sweden.

In 2017, government funding of R&D expenditure amounted to 122 million euros, or 40%. In 2017, 72% of the research and development expenditure of the non-profit institutional sector and 4% of the business enterprise sector came from the state budget. It should be noted that the funds allocated for research and development through the state budget include finances granted under the Structural Funds, which are included in the state budget, and are therefore counted as government allocations. The share of R&D financing in general government expenditure was 1.32%. The share of foreign funds in research and development spending was 15% in 2017.

In 2017, slightly more than half of the total R&D expenditure was allocated to experimental development, the share of basic research was 28% and the share of applied research was 21%. By sectors, the distribution is different. In the higher education sector and public sector, contributions to basic research accounted for the largest share. In the business sector, however, putting knowledge into practice was preferred – 82% of research and development expenditure was related to experimental development. As in previous years, in 2017, labour costs accounted for the largest share (56%) in research and development expenditure and investments accounted for 11%. In the business sector, the share of labour costs in research and development expenditure was 60% and the share of investments was 14%.

In 2017, the number of full-time equivalent persons employed in R&D was 6,048, which is 5% more than the year before. Full-time equivalent researchers and engineers numbered 4,674, which is 8% more than in 2016. In 2017, as in 2016, women accounted for 45% of persons employed in R&D, and 41% of researchers and engineers.

Read more from Statistics Estonia

Airbnb to cooperate with tax authority

Online accommodation and hospitality marketplace Airbnb is to share user data with the Estonian Tax and Customs Board (MTA), according to the Baltic News Service (BNS).

An MTA spokesperson confirmed to the BNS that the cooperation is underway and that further details will be made public on Wednesday, at a press conference to be attended by MTA deputy director Rvio Reitmann and Airbnb head of public policy, Patrick Robinson.

The Estonian Association of Hotels and Restaurants (EHRL) had previously stated that Airbnb represents unfair competition and encourages a hidden economy in the sector. It demands that Airbnb income be taxed as is the case in neighbouring Finland.

The EHRL has also blasted plans for a one-euro-per-person-per-day tourist tax applicable in Tallinn only, as proposed by Tallinn city council chief Mihhail Kõlvart (Centre).

Since 2016, an individual submitting a tax return has been required to confirm receipt/non-receipt of rental income. Such income is subject to tax on a gross basis.

At press time, a quick search on the Airbnb site for accommodation for one adult in central Tallinn on the weekend of 7-9 December yielded over 200 results, ranging in price from €9 to over €100 per night. Searches in Tartu and Pärnu resulted in about 50 and 200 options respectively, in a similar price range.

Source: ERR News

Enterprise Estonia to open office on US east coast in 2019

Enterprise Estonia is to open an office on the east coast of the United States in 2019, offering cooperation between US partners in industry and technological development and businesses participating in its business and product development programs.

The exact location of the office has not yet been announced, though cooperation with partners in the state of South Carolina seems to have been the genesis of the move.

“If an Estonian enterprise finds a partner from South Carolina within the framework of this agreement, it will have the option of receiving support from the development program or product development aid to finance the project,” Tanel Rebane, director of the Trade Development Agency at Enterprise Estonia, said.

Read more from ERR News

Dubai company putting €100 million into Tallinn-Helsinki tunnel

Dubai engineering solutions giant ARJ Holding Ltd is investing €100 million in the Tallinn-Helsinki tunnel project, tunnel designer Peter Vesterbacka announced at a press conference on Monday.

Mr Vesterbacka, chief of FinEst Bay Area, the group behind the tunnel project, pointed out the total cost of the tunnel stands at €15 billion, with an investment period of 30 years; the tunnel itself has a projected life span of 120 years, he said.

Finest Bay Area Leader Vesterbacka said the total cost of the project is estimated at €15 billion. The investment period is 30 years and the tunnel should last 120 years.

Read more from ERR News