Exports of goods increased by 16 pct in April

According to Statistics Estonia, in April 2018, the exports of goods increased by 16% and imports by 13% compared to April 2017. The growth in trade in April of this year was broad-based, with increased exports and imports in both mineral products and mechanical appliances.

In April 2018, exports from Estonia amounted to 1.2 billion euros and imports to Estonia to 1.4 billion euros at current prices. The trade deficit was 171 million euros (in April 2017, it was 185 million euros).

In March, the top destination countries of Estonia’s exports were Finland (16% of Estonia’s total exports), Sweden (12%) and Latvia (10%). Electrical equipment and base metals and articles of base metal were the main commodities exported to Finland; electrical equipment and miscellaneous manufactured articles (prefabricated wood buildings, furniture) were the main commodities exported to Sweden; mineral products (motor spirit, electricity) and transport equipment (motor cars) were the main commodities exported to Latvia. The biggest increase occurred in exports to Finland (up by 34 million euros), Latvia (up by 33 million euros) and the USA (up by 19 million euros). In exports to Finland, the exports of electrical equipment and wood and articles of wood increased. There was also an increase in the exports of mineral products and transport equipment to Latvia and electrical equipment to the USA. The biggest decrease occurred in exports to Sweden (down by 16 million euros).

In April, the biggest share in the exports of goods was held by electrical equipment (15% of the total exports of goods), followed by mineral products (13%), and wood and articles of wood (11%). The greatest increase was in the exports of mineral products (up by 50 million euros), mechanical appliances (up by 25 million euros) and transport equipment (up by 21 million euros). The growth in the exports of mineral products was mainly due to increased export quantities (motor spirit up by 51% and electricity up by 31%), compared to the same period of the previous year.

The share of goods of Estonian origin in total exports was 70% in April 2018. The exports of goods of Estonian origin increased by 14% and re-exports by 23%. Increased exports in the commodity sections of mineral products, wood and articles of wood and mechanical appliances contributed to the increase in the exports of goods of Estonian origin. Among the main destination countries, the exports of goods of Estonian origin had the highest share (over 90%) in exports to the Netherlands, Denmark, Sweden and Norway.

The main countries of consignment in April were Finland (14% share of Estonia’s total imports), Germany (11%) and Sweden (10%). The main commodities imported were: mineral products and metals and articles of base metal from Finland; mechanical appliances and transport equipment from Germany; and electrical equipment and transport equipment from Sweden. The biggest increase occurred in imports from Finland (up by 42 million euros), Belarus (up by 33 million euros, i.e. approximately 8 times) and Sweden (up by 26 million euros). Mineral products (motor spirit, fuel additives) were imported more from Finland and Belarus, electrical equipment from Sweden. Imports decreased the most from Poland (down by 25 million euros) and Turkey (down by 21 million euros), with less transport equipment imported.

The main commodities imported to Estonia were electrical equipment (15% of Estonia’s total imports of goods), mineral products (13%), mechanical appliances and transport equipment (both 11%). The greatest increase was in the imports of mineral products (up by 67 million euros), mechanical appliances (up by 30 million euros) and electrical equipment (up by 21 million euros). Increased imports of mineral products were due to higher import quantities (imports of fuel additives increased by approximately 4 times and imports of motor spirit by 31%), compared to the same period of the previous year.  In April, the greatest decrease occurred in the imports of transport equipment (down by 48 million euros).

In April 2018, the foreign trade export volume index increased by 16% and the import volume index by 12% compared to April 2017.Estonia’s foreign trade by month, 2016–2018

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2017 was a good year for exports

The year 2017 was a successful one for the Estonian economy. The economy grew at a clearly faster rate than in previous years. Growth was boosted by the industrial sector, which is focused on exports, and by branches of the economy that serve domestic demand. The real growth in exports was less than in 2016, though this was due to a reduction in exports from one branch of industrial production. Investment finally started to increase in both the business and government sectors. Only investment by households remained the same as a year earlier. Against this background the current account surplus increased to 734 million euros, or 3.2% of GDP. The growth in passenger transport by air and information and computer services boosted the surplus in exports and imports of services by around one fifth. Alongside the growth in the surplus in the goods and services account, the surplus in the current account was also increased by fines received from abroad. The outflow of investment income was at about the same level as in the previous year, which indicates that the profit earned by companies based on foreign capital had not increased during the year.

More direct investment was made in Estonia from abroad than was made abroad from Estonia. New direct investment of around one billion euros was made in the equity capital of foreign-owned companies in 2017, which is around double the amount seen in the past four or five years. At the same time earlier investments were reduced by about the same amount, so overall there was no net flow of new money into the country. The reinvestment by non-financial companies of profits earned earlier in Estonia meant that the inflow of direct investment was still larger than the outflow, and it was at the same level as a year earlier.

Estonian assets abroad grew more than liabilities in 2017, and so Estonia was a net lender. As the current account has been in surplus for some time, there is money available in the Estonian economy that is being placed abroad more and more. In consequence, Estonia’s net international investment position, which is the difference between the foreign assets and liabilities of the country, has moved steadily towards balance. In 2017 it stood at around -30% of GDP.

Source: Bank of Estonia
Author: Kristo Aab, Economist at Eesti Pank

Estonian trade reached record level last year

According to Statistics Estonia, in 2017 compared to 2016, the exports of goods increased by 8% and imports by 9%. In 2017, the exports of goods from Estonia amounted to 12.8 billion euros and imports to Estonia to 14.7 billion euros at current prices.

The trade deficit in 2017 was 1.9 billion euros, having increased by 315 million euros compared to 2016. The increase in the trade deficit was affected the most by the imports of transport equipment (incl. ships). The largest surplus was in the trade in wood and articles of wood and miscellaneous manufactured articles (incl. furniture); the largest deficit was registered in the trade in transport equipment and in raw materials and products of the chemical industry.

In 2017, the share of European Union countries in Estonia’s total exports was 71% and in total imports 82%. The trade deficit with other European Union countries totalled 3 billion euros, which is 610 million euros more than in 2016. In trade with EU countries, exports increased by 4% and imports by 9%. Trade in goods with non-EU countries grew more – exports increased by 18% and imports by 11%.

As in previous years, electrical equipment was exported the most, accounting for 17% of Estonia’s total exports in 2017. The second and third places were held by the exports of wood and articles of wood (11%) and mineral products (10%). The increase in exports was mostly affected by a rise in the exports of mineral products (incl. fuel), base metals and articles of base metal (incl. metal waste) and wood and articles of wood (incl. sawn timber). The biggest decrease in 2017 was recorded in the exports of electrical equipment.

The top destination country of Estonia’s exports in 2017 was Finland (16% of Estonia’s total exports). Sweden (14%) was second and Latvia (9%) third. The biggest increase occurred in exports to Finland, followed by Russia and Germany. Exports to Sweden, Mexico and Nigeria decreased the most.

The share of goods of Estonian origin in total exports was 72% in 2017. In the exports of goods of Estonian origin, the largest increase was in the exports of mineral products, base metals and articles of base metal and wood and articles of wood. The exports of electrical equipment dropped significantly. The main destination countries of goods of Estonian origin are Finland, Sweden and Germany. The biggest increase in the exports of goods of Estonian origin was in the exports to Germany and Finland and the biggest decrease in the exports to Sweden and Mexico.

In 2017, the main commodity imported to Estonia was electrical equipment; its share amounted to 15% of Estonia’s total imports. This was followed by transport equipment (13%), agricultural products and food preparations, mechanical appliances and mineral products (each 10%). In a year, the imports of transport equipment (incl. ships, cars) and mineral products (incl. fuel) increased the most. The imports of electrical equipment decreased.

The main countries of consignment in 2017 were Finland (14% of Estonia’s total imports), Germany (11%), and Lithuania (9%). The biggest increase occurred in imports from Finland, followed by Russia and Sweden. The largest decrease was registered in imports from Hungary, the USA and Canada.

Estonia exported goods to 180 countries and imported goods from 133 countries. A positive foreign trade balance was recorded in the case of 130 countries. The biggest surplus was recorded in trade with Sweden, followed by Norway and the USA. The biggest deficit was recorded in trade with Poland, Germany and Lithuania.

In December 2017, exports of goods from Estonia amounted to 1 billion euros and imports to Estonia to 1.2 billion euros. Compared to December 2016, exports increased 3% and imports 4%. In December 2017, the growth in exports was affected the most by the exports of cereals, and the growth in imports by fuel imports.

In December 2017, the foreign trade export volume index increased by 2% and the import volume index by 11% compared to the same period of 2016.Estonia’s foreign trade, 2004–2017

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Exports of goods increased by 8 and imports by 9 pct in November

According to Statistics Estonia, in November 2017 compared to November 2016, the exports of goods increased by 8% and imports by 9%. The growth in exports and imports was broad-based, a small increase occurred in most commodity sections.

In November 2017, exports from Estonia amounted to 1.2 billion euros and imports to Estonia to 1.3 billion euros. The trade deficit was 111 million euros (in November 2016, it was 94 million euros).

In November 2017, the top destination countries of Estonia’s exports were Finland (16% of Estonia’s total exports), Sweden (12%) and Latvia (10%). The biggest increase occurred in exports to Latvia (up by 27 million euros), Saudi Arabia (up by 23 million euros) and the United States (up by 16 million euros). In exports to Latvia, the exports of mineral products (fuel additives, electricity) and transport equipment (motor cars) increased. There was also an increase in the exports of agricultural products (barley) to Saudi Arabia and in the exports of electrical equipment (communication equipment) to the United States. The biggest decrease occurred in exports to Sweden (down by 50 million euros), where less electrical equipment was delivered.

The biggest share in exports was held by electrical equipment, followed by agricultural products and food preparations, and wood and articles of wood. The greatest increase was in the exports of mineral products (up by 17 million euros), mechanical appliances (up by 16 million euros), and wood and articles of wood (up by 15 million euros). The exports of electrical equipment decreased (down by 17 million euros).

The share of goods of Estonian origin in total exports was 73% in November 2017. The exports of goods of Estonian origin grew 8% and re-exports 9%. The exports of goods of Estonian origin grew the most in the commodity sections of mineral fuels, cereals, and wood and articles of wood. Among the main destination countries, the exports of goods of Estonian origin had the highest share (above 90%) in exports to Denmark, Sweden and Norway.

The main countries of consignment in November 2017 were Finland (13% of Estonia’s total imports), Germany (11%), Lithuania (9%), Latvia (9%) and Sweden (9%). The biggest increase occurred in imports from Sweden (up by 25 million euros), Poland (up by 21 million euros) and Finland (up by 16 million euros). Transport equipment (motor cars) was imported the most from Sweden, raw materials and products of chemical industry (medicaments) from Poland and mineral products (electricity) from Finland. Imports from Hungary decreased the most (down by 5 million euros), with less electrical equipment imported.

The main commodities imported to Estonia were electrical equipment, transport equipment, and agricultural products and food preparations. The biggest increase was in the imports of raw materials and products of chemical industry (up by 31 million euros), transport equipment (up by 28 million euros) and mechanical appliances (up by 15 million euros).

In November 2017, the foreign trade export volume index increased by 4% and the import volume index by 20% compared to the same period of 2016.Estonia’s foreign trade by month, 2015–2017

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Exports of both goods and services increased in July

The flash estimate1 put the Estonian current account at 49 million euros in surplus in July 2017. The surplus on the goods and services account was 87 million euros, which was 17 million euros less than a year earlier. Volumes of both goods and services increased. Goods exports were up by 8% over the year and imports by 11%, and so the deficit on the goods account increased by 34 million euros over the year to 131 million euros. The surplus on the services account was large in the summer months and stood at 218 million euros, up 17 million euros over the year. Services exports grew by 8% and imports by 7%. The net outflow of investment income and current transfers, or the primary and secondary income accounts, increased by 8 million euros to 38 million euros.

The current and capital accounts were in surplus by a total of 112 million euros, meaning that the Estonian economy was a net lender to the rest of the world, so the country as a whole invested more financial assets abroad than it received from there.

 Source: Bank of Estonia

Foreign trade increased faster in Estonia than in the euro area

  • The surplus on the current account of the Estonian balance of payments in 2016 was the largest since independence was regained
  • Foreign trade picked up last year as both exports and imports increased
  • Estonia is one of the few EU member states to owe less to other countries than is owed to it

According to adjusted figures, the surplus on the current account of the Estonian balance of payments in 2016 was the largest since independence was regained, amounting to 0.4 billion euros or around 2% of GDP. Exports and imports of both goods and services grew notably faster than in the euro area as a whole, as the turnover of goods and services increased by less than 1% in the euro area, but by over 4% in Estonia. As exports of goods grew faster than the imports, the deficit on the goods account narrowed to 0.8 billion euros. The surplus on services decreased slightly over the year to 1.6 billion euros.

Estonia was a net lender to the rest of the world again in 2016 as the outflow of capital exceeded the inflow by 0.4 billion euros. Capital mainly moved through portfolio investment, with the largest part of investments going into foreign securities and fund shares.

Estonia is one of the few member states of the European Union to owe less to other countries than is owed to it, and at the end of 2016 the rest of the world owed Estonia 21.5 billion euros while Estonia’s debt was 19 billion euros. This means that Estonia’s external assets exceeded external liabilities by 2.5 billion euros. The same case applies only in Bulgaria, the Czech Republic, Denmark, Belgium and Germany while the other European Union members have larger debts to the rest of the world than they have invested there.

The current account balance and trade in goods and services

Net external debt (debt liabilities minus debt assets) as a ratio to GDP in 2016 %

Eesti Pank publishes the balance of payments yearbook each autumn for the previous year. The balance of payments yearbook contains a detailed analysis of the three main documents containing external sector statistical data – the balance of payments, the international investment position and the gross external debt – at national and sectoral levels illustrated with tables and figures. The time series are of up to ten years. This year’s yearbook will contain a comparison of the Estonian external sector with other European countries for the third time.

Source: Bank of Estonia

Estonian current account at 67 mEUR in surplus in June 2017

The flash estimate1 put the Estonian current account at 67 million euros in surplus in June 2017. The surplus on the goods and services account was 104 million euros, which was 11 million euros more than a year earlier. Volumes of both goods and services increased. Goods exports were up by 8% over the year and imports by 6%, and so the deficit on the goods account narrowed by 8 million euros over the year to 81 million euros. Services exports were up by 5% and imports by 6%, and the surplus on the goods account widened by 4 million euros to 185 million euros. The net outflow of investment income and current transfers, or the primary and secondary income accounts, increased by 16 million euros to 37 million euros.

The current and capital accounts were in surplus by a total of 85 million euros, meaning that the Estonian economy was a net lender to the rest of the world, so the country as a whole invested more financial assets abroad than it received from there.

1 The quarterly balance of payments is compiled from a combined system of representative primary data sources, including surveys of companies, while the monthly balance of payments draws from a considerably smaller database. Although the monthly report uses as much of the data available for the month reported as possible, including administrative data sources and reports on international payments, it is subjective to a certain degree, which is why it is called an estimate. Once the quarterly balance of payments is released, the monthly balances of payments are adjusted accordingly. For more on the principles used in compiling the flash estimate, see here.

Eesti Pank publishes the flash estimate of the balance of payments monthly for the last month but one. Eesti Pank will publish the balance of payments for the second quarter of 2017 on 7 September 2017.

Statistical releases are published by Eesti Pank together with statistical data. The release is independent of economic policy releases and is presented separately from them.

Source: Bank of Estonia