Diesel fuel is 26 pct more expensive than last year

According to Statistics Estonia, the change of the consumer price index in February 2017 was 1.3% compared to January 2017 and 3.4% compared to February of the previous year.

Compared to February 2016, goods were 3.7% and services 2.7% more expensive. Regulated prices of goods and services have risen by 7.5% and non-regulated prices by 2.3% compared to February of the previous year.

Compared to February 2016, the consumer price index was affected the most by the price increase of motor fuel. Compared to February of the previous year, diesel fuel was 25.8% and petrol 22.7% more expensive. A greater impact on the index came also from the 4.1% increase in the prices of food and non-alcoholic beverages and from the increase in the prices of alcoholic beverages (5.2%) and tobacco (8.7%). Compared to February 2016, milk, dairy products and eggs were 7.4% and sugar and confectionery 6.4% more expensive. Of food products, the biggest price increases were seen for sugar (28%), butter (24%) and fresh fish (21%).

In February, compared to January, the consumer price index was affected the most by transport. In a month, motor fuel prices rose 4.9% and the plane tickets bought for February were 37% more expensive than tickets for January. A greater impact on the index came also from the 1.6% increase in the prices of food, the main contributors of which were vegetables, which were 7.5% more expensive, and sugar and confectionery, which were 3.5% more expensive.

The previous time that the monthly change of the consumer price index was 1.3% or greater was in March 2010 when it was also 1.3%.

Change of the consumer price index by commodity groups, February 2017
Commodity group February 2016 – February 2017, % January 2017 – February 2017, %
TOTAL 3.4 1.3
Food and non-alcoholic beverages 4.1 1.3
Alcoholic beverages and tobacco 6.2 2.9
Clothing and footwear 1.8 3.5
Housing 1.9 0.0
Household goods 1.1 0.5
Health 2.1 0.2
Transport 8.9 3.4
Communications -1.4 -0.3
Recreation and culture -0.4 -0.1
Education 2.8 -0.1
Hotels, cafés and restaurants 3.9 0.8
Miscellaneous goods and services 2.5 1.5

Statistics Estonia publishes the consumer price index on the 5th working day of each month, after the end of the reporting period. For the statistical activity “Consumer price index”, the main representative of public interest is the Ministry of Finance, commissioned by whom Statistics Estonia collects and analyses the data necessary for conducting the statistical activity.

Source: Statistics Estonia

8 pct more hotel nights in January

According to Statistics Estonia, in January 2017, domestic and foreign tourists who stayed in Estonian accommodation establishments numbered 192,000, which was 8% more than in January 2016.

Compared to January 2016, the number of foreign tourists who used the services of accommodation establishments increased 8%. Foreign tourists accounted for 55% of the total number of tourists. In January 2017, a total of 106,000 foreign tourists used the services of accommodation establishments. 62% of the foreign tourists came from European Union countries. 35% of the accommodated foreign tourists came from Finland, 29% from Russia and 8% from Latvia. Compared to January 2016, the number of tourists arriving from Russia and Latvia has increased by 15% and 22%, respectively. Also, there was an increase in the number of tourists arriving from Sweden, Norway and the United Kingdom. The number of tourists from Finland remained at the level of January 2016. Of the accommodated foreign tourists, 70% came to Estonia for holidays, 23% were on a business trip and the rest had some other reason for visiting Estonia. Foreign tourists mainly preferred the accommodation establishments of Tallinn (75% of accommodated foreign tourists), Pärnu city (7%), Tartu city (5%) and Ida-Viru county (5%).

In January 2017, domestic tourists who used the services of accommodation establishments numbered 86,000, i.e. 6,000 domestic tourists more than in January 2016. Of the domestic tourists, 62% were on a holiday trip and 25% on a business trip. 29% of the domestic tourists who used accommodation services stayed in the accommodation establishments of Harju county, 17% in Pärnu county, 14% in Tartu county and 8% in Ida-Viru county.

In January, 954 accommodation establishments offered services for tourists. 19,000 rooms and 43,000 beds were available for tourists. 34% of the rooms and 27% of the beds were occupied. The average cost of a guest night was 36 euros, i.e. one euro more than in the same month of the previous year. The average cost of a guest night was 42 euros in Harju county, 32 euros in Tartu county, 27 euros in Pärnu county and 30 euros in Ida-Viru county.

Read more from Statistics Estonia

Foreign trade continued to grow in January

According to Statistics Estonia, in January 2017, the exports of goods increased by 14% and imports by 40% compared January 2016. The rise in exports was affected the most by an increase in the exportation of mineral products, and the rise in imports by non-recurring big-volume transactions with transport equipment.

In January 2017, exports from Estonia amounted to 0.9 billion euros and imports to Estonia to 1.4 billion euros at current prices. The trade deficit was 430 million euros (in January 2016, it was 155 million euros). The main reason for the record trade deficit is non-recurring transactions with transport equipment. Without these transactions, imports increased 12% and trade deficit was 164 million euros.

The top destination countries of Estonia’s exports in January were Finland (15% of Estonia’s total exports), Sweden (15%) and Latvia (9%). The biggest increase occurred in exports to the Netherlands (up by 25 million euros, i.e. two-fold), Finland (up by 16 million euros) and Germany (up by 15 million euros). These rises are mainly due to increased exports of mineral products to the Netherlands, of agricultural products and food preparations to Finland and of electrical equipment to Germany. Exports to Sweden decreased the most.

The biggest share in exports was held by electrical equipment, followed by wood and articles of wood and mineral products. The increase in exports was affected by the exports of mineral products (up by 39 million euros) and base metals and articles of base metal (up by 27 million euros). There was a decrease in the exports of mechanical appliances.

The share of goods of Estonian origin in total exports was 73%. In January 2017 compared to January 2016, the exports of goods of Estonian origin grew 14%, while re-exports, i.e. the exportation of goods imported from a foreign country, increased 12%. The rise in the exports of goods of Estonian origin was affected the most by an increase in the exports of base metals and articles of base metal (incl. ferrous waste and scrap), wood and articles of wood (incl. planed coniferous wood) and mineral products (incl. shale oil, fuel oil). Goods of Estonian origin are exported the most to Sweden, Finland and Germany. The biggest increase in the exports of goods of Estonian origin was in the exports to Germany (up by 13 million euros) and decrease in the exports to Sweden (down by 23 million euros).

The main countries of consignment in January 2017 were Finland (27% of Estonia’s total imports), Lithuania (10%), Germany (8%) and Russia (8%). The biggest increase occurred in imports from Finland (up by 226 million euros, i.e. about three-fold) and Russia (up by 44 million euros), while imports from Hungary decreased the most (down by 4 million euros).

In January, the main commodities imported to Estonia were transport equipment, electrical equipment and mineral products. The growth in imports was affected the most by an increase in the imports of transport equipment (incl. ships), mineral products (incl. motor spirit) and base metals and articles of base metal (incl. flat-rolled products). The biggest fall occurred in the imports of mechanical appliances.

In January 2017, foreign trade export volume index increased by 2% and import volume index by 12% compared to the same period of the previous year.Estonia’s foreign trade by month, 2014–2017

Read more from Statistics Estonia

9,000 job vacancies in 4Q 2016

According to Statistics Estonia, there were nearly 9,000 job vacancies in the enterprises, institutions and organisations of Estonia in the 4th quarter of 2016. Compared to the 3rd quarter, when the number of job vacancies reached a 7-year high, in the 4th quarter, the number of job vacancies decreased by 18%. Compared to the 4th quarter of 2015, the number of job vacancies increased by 37%.

The share of vacant and occupied posts in the total number of posts continued to be highest in manufacturing (19%), wholesale and retail trade (16%) and education (10%).

The rate of job vacancies, i.e. the share of job vacancies in the total number of jobs, was 1.7% in the 4th quarter of 2016, which is 0.3 percentage points lower than in the 3rd quarter of 2016 and 0.4 percentage points higher than in the 4th quarter of 2015.

In the 4th quarter, the rate of job vacancies was highest in other service activities (4.0%), accommodation and food service activities (3.7%), information and communication (3.3%) and administrative and support service activities (3.0%). The rate of job vacancies was lowest in mining and quarrying (0.4%), construction (0.5%) and agriculture, forestry and fishing (0.7%).

Compared to the 4th quarter of 2015, the rate of job vacancies increased the most in other service activities and accommodation and food service activities. The rate of job vacancies decreased the most in financial and insurance activities.

Most of the vacant posts were in Harju county (72%), including Tallinn (63%), followed by Tartu county (8%) and Ida-Viru county (5%). The rate of job vacancies was highest in Harju county and lowest in Saare, Lääne-Viru and Viljandi counties.

Three quarters, or 75% of the vacant posts were in the private sector and every forth vacant post was in the public sector. In the 4th quarter of 2016, the rate of job vacancies continued to be highest in foreign private-sector enterprises (2.2%) and state organisations (2.1%). The rate of job vacancies was lowest in local government organisations (1.0%).Rate of job vacancies by economic activity, 4th quarter, 2015–2016

Rate of job vacancies, 1st quarter 2006 – 4th quarter 2016

The movement of labour is characterised by labour turnover (the total number of engaged employees and those who have left), which amounted to nearly 90,000 in the 3rd quarter of 2016, denoting a 4% decrease compared to the previous quarter and a 2% increase compared to the 3rd quarter of 2015. Compared to the 3rd quarter of 2015, the largest increase in labour turnover occurred in mining and quarrying (39.7%), water supply; sewerage, waste management and remediation activities (19.2%) and other service activities (19%), and the largest decrease in real estate activities (29.3%). In the 3rd quarter, both the number of employees hired and the number of employees who left their jobs were highest in wholesale and retail trade and manufacturing.

The data are based on the statistical activity “Job vacancies and labour turnover”, conducted by Statistics Estonia since 2005. In 2016, the sample included 12,603 enterprises, institutions and organisations; the data of randomly selected units are imputed to the total population separately in each stratum. As of the 2nd quarter of 2016, Statistics Estonia uses the data of the Employment Register of the Estonian Tax and Customs Board to pre-fill the survey questionnaires. The main representative of public interest for the statistical activity is the Ministry of Economic Affairs and Communications, commissioned by whom Statistics Estonia collects and analyses the data necessary for conducting the statistical activity.

The number of job vacancies is the total number of job vacancies on the 15th day of the second month of a quarter. A job vacancy is a paid post that is newly created, unoccupied or becomes vacant when an employee leaves, and for which the employer is actively trying to find a suitable candidate from outside the enterprise, institution or organisation concerned.

Price rises in February were primarily due to higher prices for oil and food

  • Inflation continued to rise in Estonia, and it was at its fastest for four years in February
  • Inflation is being driven by higher global prices for oil and food, and by higher excise rates
  • Core inflation has also risen in recent months because of service prices

Data from Statistics Estonia show that consumer price inflation was 3.4% in February, with prices up 1.3% on the previous month.Preliminary estimates put inflation in the euro area at 2% and prices had stopped falling in all the euro area countries according to the latest data from January. Higher inflation reduces the purchasing power of consumers, but it could be the long-awaited sign of increasing economic activity.

Inflation has risen mainly because of external factors, particularly the rise in the price of oil and food. Food prices are rising on the Estonian and European Union markets mainly because the oversupply that was exacerbated by the loss of the Russian market in 2014 has relented. A second reason is that the weather has been bad in southern Europe this year and the bad weather has harmed fruit and vegetable crops. Prices for unprocessed food, including garden produce, rose in the euro area at a record rate of 5.2% in February. More stable rises in commodities prices will be supported by the narrower fluctuations in the oil price on world markets after its jump to 55 dollars at the end of November following the OPEC agreement to cut production. Commodities prices on world markets are still relatively low in historical terms.

The causes of higher inflation in Estonia are about the same as those elsewhere in the euro area. Around one quarter of inflation in February was due to motor fuels being 23% more expensive than a year earlier, and the continuing broad-based rise in prices for food products. One reason that inflation in Estonia has been higher than the euro area average is that excise rates have risen. Excise on motor fuels, alcohol and tobacco lifted inflation by around one percentage point in February. Core inflation, which covers manufactured goods and services, has also picked up a little in recent months, and it reached 1.3% in February. It is mainly prices for services that have risen, while prices for manufactured goods have climbed more slowly because of cheap import prices.

Inflation in Estonia and euro area

Source: Bank of Estonia (see better graph here)

Author: Sulev Pert, Economist at Eesti Pank

Labour costs are around 50 pct of GDP in Estonia

  • In a sign of improvement in the economy, labour costs grew slightly more slowly than GDP rather than faster than it for the first time in three years
  • For competitiveness to improve, wage rises will have to be more restrained than economic growth at current prices
  • Wage pressures will be increased in future by increased infrastructure investment and the presidency of the European Union

The average gross wage was 6.9% higher in the final quarter of 2016 than a year earlier, which is a smaller rise than in the first three quarters of the year. Statistics for the national accounts show payroll growth slowing and not increasing as a share of GDP for the first time in a long while. Wage growth slowing while economic growth speeds up is a move in the direction of sustainable development that has been referred to as a soft landing in economic forecasts.

Wage growth did not slow equally in all sectors and it was restrained particularly by slower growth in trade and agriculture, while wages rose more quickly in industry and the general government sector. Despite the faster growth in wages, GDP data show that the match between productivity and wages in manufacturing improved, strengthening the competitiveness of companies in foreign markets. Improved competitiveness among exporters is also indicated by a survey for the European Commission and the Estonian Institute of Economic Research.

Labour costs are still around 50% of GDP in Estonia, which is higher than the European Union average and similar to the level seen during  the crisis. The wages of Estonian workers have approached the level of the European Union faster than company profits have. This could be seen to mean that employers have had to raise wages for employees more than they have managed to raise the efficiency of production in their companies. Weak profitability may also deal a blow to workers, as it will make it less certain that jobs will be preserved. A soft landing needs wage rises to continue to be more restrained than economic growth at current prices

Several factors may boost wage growth again in future. Increased investment in infrastructure will probably mean more labour is needed in the construction sector, general government wages will come under pressure because of the upcoming presidency of the European Union and the coalition agreement to raise wages for employees working in education, and in January the minimum wage rose by a further 9.3%. Equally, wage pressure will be eased a little by the work ability reform, which will bring people into the labour market, and by the notably slower decline than previously in the number of people of working age in Estonia.


Eesti Pank observes and comments on wage developments as labour costs have a direct impact on the price of goods and services produced in Estonia and wage growth is an important indicator of price stability.

Source: Bank of Estonia (Eesti Pank)

Author: Orsolya Soosaar, Economist at Eesti Pank

Businesses need to be ready for the new 50-euro banknotes

  • Fifty-euro notes account for 36% of the total number of euro banknotes in circulation
  • The main security features of the new fifty-euro note are the transparent portrait window, the portrait watermark, the emerald green number and the raised lines
  • The new note will enter into circulation in the whole of the euro area on 4 April
  • Businesses will need to update their cash handling systems
  • Seminars will be held across Estonia so businesses can see the new security features

At the start of April, Eesti Pank and the other central banks of the euro area will release a new €50 banknote into circulation with a new design and new security features. So that the new note can enter smoothly into circulation, it is important for companies to update their cash handling equipment in good time, and to know about the new features of the notes.

The most eye-catching change to the fifty-euro notes of the new series is the same as on the new twenty-euro notes, the transparent portrait window on the right of the note on the hologrammic strip. The portrait window is transparent, and looking at the note against the light reveals a portrait of Europa in the window. The other security features – the watermark portrait of Europa and hologrammic strip, the emerald green number, and the short raised lines on the edge of the note – are like those on the five and ten and twenty-euro notes of the new series.

“All traders have to accept currency that is legal tender, and those who haven’t made preparations are nearly at the last moment for doing so”, said Rait Roosve, Head of the Cash and Infrastructure Department at Eesti Pank. “The new notes must be accepted even if the technical upgrades have not been made or there is no cash authenticating equipment. The authenticity of all the banknotes can be checked by hand, and not just by professional cash handlers but by anyone”, he emphasised.

The new fifty-euro note will enter into circulation on 4 April. Paying with the new banknotes will be simple and straightforward as long as merchants update their cash-handling equipment and authentication devices. To do this they will need to contact their equipment suppliers.

To check the security features of notes of both the old and the new series, look at the banknote against the light, tilting it back and forth, and feel its surface. Further details on the security features of the banknotes can be found on the new-euro website.

Further information

  • Eesti Pank is organising thorough training courses for cash handlers in February and March on the new banknote in Tallinn, Tartu, Jõgeva, Võru, Pärnu, Haapsalu, Narva and Rakvere. More information about the training sessions and related publications can be found in Estonian on the Eesti Pank website. Anyone interested in these courses may contact Eesti Pank about them directly.
  • In addition to this, the European Central Bank will send all cash handlers in Estonia a booklet on the new €50 banknote. The booklet is free and can also be ordered from Eesti Pank (info@eestipank.ee, 6680 719).
  • The first series of fifty-euro notes, which are currently in circulation, will continue to be valid. This means they do not need to be exchanged as they can be used in the future for paying in shops and elsewhere. The same was true when the new five, ten and twenty notes were introduced.
  • When the new fifty-euro notes are introduced into circulation from 4 April, it will be done gradually. This means that the earlier banknotes of the first series will be in use at the same time as the new second-series notes. The same happened with the five, ten and twenty-euro notes, which are in use in banks, shops, cash machines and elsewhere with both the new and old designs.
  • All the banknotes of the first series will keep their value indefinitely, though at some point it will no longer be possible to use them for paying in shops. When this point has been decided on, it will be announced and publicised well in advance. After this point, it will only be possible to exchange the old notes for new ones at Eesti Pank and other central banks of the euro area, and there will be no limit on how long this can be done for.
  • Anyone can learn how to identify the new fifty-euro notes using the simple method of feel, look and tilt. It is always best to check multiple security features on a note, not just look at only one.
  • The fifty-euro notes of the second series have new and additional security features that are like those on the five, ten and twenty-euro notes. All of the designs have a series of short raised lines on the edges of the note, a portrait watermark, a portrait hologram, and an emerald green number. The twenty and fifty-euro notes of the second series also have a portrait window. The window is a transparent part of the note, but the front and reverse sides of the window are slightly different. The window in the hologram seen from the front shows a portrait of Europa, and when the note is tilted, the value of the note appears in the window and rainbow-coloured lines appear around it. On the back of the banknote, rainbow-coloured value numerals appear in the window.
  • Pictures and videos of the new €50 note can be found at http://www.new-euro-banknotes.eu/Resources/IMAGES.
  • The European Central Bank has published a list of devices that can authenticate banknotes of the new series on its website and has added a list of those that can authenticate the €50 note (http://www.ecb.europa.eu/euro/cashprof/cashhand/devices/html/results.en.html).

 

Source: Bank of Estonia