Estonian fish processing businesses hope to double exports to Japan

The Estonian fish processing sector hopes to double its exports to Japan next year, industry executives attending a fish fair in Tokyo told BNS.

“We expect sales in Japan to reach at least seven million euros in 2017,” said Valdur Noormagi, manager of the Estonian Association of Fisheries. He added that exports to Japan this year are estimated to total 3 to 3.5 million euros in value.

Read more from ERR News

Number of stateless people in Estonia keeps shrinking

According to the Ministry of the Interior, the number of stateless permanent residents of Estonia has decreased by more than 45,000 over the past decade, with 80,754 left early in 2016.

Three factors contributed to the decrease, namely taking on citizenship of a third state, becoming an Estonian citizen, and death.

Read more from ERR News

Businessman Oliver Kruuda doesn’t agree with suspicions

Businessman and owner of Tere AS, Oliver Kruuda, said in an interview with ERR’s TV news on Thursday that he didn’t agree with the suspicions raised against him, but that Tere would likely need to be broken up. Kruuda had been arrested earlier this week on suspicions of tax fraud.

Kruuda said in the interview that there were different interpretations of the situation rather than a tax fraud case. He doesn’t see a reason why Tere AS should file for bankruptcy, but instead said that the company would be reorganized.

Read more from ERR News

Estonian customs board purchased new x-ray inspection equipment

Estonian Tax and Customs Board (ETCB) concluded a procurement contract of 12, 1 mln euros on Tuesday with the Chinese technology company Nuctech for the purchase of five additional x-ray scanners.

According to Marek Helm, Director General of ETCB, this is the biggest investment in the history of ETCB, which enables the customs to streamline customs checks for traders.

‘With x-ray technology five minutes and one scanned image is enough to make a decision on the need for a first-level control. Physical examination, by contrast, would take several hours including loading and unloading,’ Mr Helm explained.

‘The experience so far related to the existing x-ray equipment has shown that this is the most efficient solution for the inspection of goods traffic and detection of illicit goods. According to Estonian and other states’ experience border crossing points where such technology is not used have proved to be the preferred checkpoints for smugglers,’ Mr Helm said.

By the end of next year it is planned to install fixed x-ray units at Narva railway station and Luhamaa and Koidula border crossing points. Two mobile x-ray units will presumably be completed by the second half of 2017 and used at Narva road border crossing point, the ports of Sillamäe and Tallinn and border crossing points between Latvia and Estonia.

The biggest smuggling case detected with the help of x-ray scanner was in Paldiski in 2015 resulting in a seizure of 7, 7 million illicit cigarettes (1.3 mln euro loss of tax revenues).

ETCB concluded the procurement contract with the European branch of the Chinese company, Nuctech Warsaw Company Limited, based in Poland. The value of the procurement contract is 10.1 mln euros plus VAT of 2 mln euros.

The purchase of the equipment is financed from the European Cohesion Fund in the amount of 2.55 mln euros, and from the state budget in the amount of 9.57 mln euros.

Source: Estonian Tax and Customs Board

Estonian labour market improved in the second quarter

  • Employment improved despite slow economic growth
  • Registered unemployment increased in Ida-Virumaa
  • The work ability reform is expected to boost registered unemployment and the labour force participation rate

Figures from Statistics Estonia show unemployment was 6.5% in the second quarter of 2016 and employment was 2.6% higher than a year earlier. Seasonally adjusted employment also grew quarter-on-quarter. As the number of 15-74-year-old people who participated in the labour market was almost 2% higher than a year ago, the labour force in the economy grew even though the population keeps declining at a slow but steady pace.

Not all data sources indicate an increase in employment, though. Compared to the figures from the labour force survey, data from the Tax and Customs Board on the number of people receiving wages were slightly more pessimistic, as this number fell by 0.4% in the second quarter of 2016 compared to the same time a year ago. This gap may stem from different definitions of the figures (e.g. the fact that data from the Tax and Customs Board do not include the shadow economy), but also indicate that the labour force survey overestimates employment growth.

According to the data published today, the survey-based number of unemployed, which covers both registered and unregistered unemployment, did not change compared to last year. However, data from Töötukassa, the Estonian unemployment insurance fund, show that the number of registered unemployed increased by 4.9%, year-on-year. Growth was the biggest in Ida-Virumaa, with 21% more registered unemployed in the second quarter than a year ago. This was probably caused by redundancies in the oil shale and energy sector, where the output fell as a result of low energy prices. 646 or 43% more redundancy benefits were paid out in the second quarter of 2016 compared to the same time in 2015.

The number of disabled people among the registered unemployed has been climbing for some time now. It can be expected that the work ability reform launched this July will lead to an increasing number of people with reduced capacity for work registering as unemployed. This means that the growth of registered unemployment will accelerate and the share of people active in the labour market will rise even further.

Source: Bank of Estonia

Author: Orsolya Soosaar. economist at Eesti Pank

Foreigners spend more money in Estonia

Over 1.6 million foreign tourists visited Estonia in the second quarter of 2016, which is 4% more than at the same time a year earlier.Although the amount of tourists from Finland, whose visits make up a third of all visits, decreased by 1% compared to last year, the number of visits made by European Union citizens grew by 2% in a year. The number of visits made from Spain and Portugal, for example, increased by more than a quarter. Russian citizens came to Estonia on 200,000 occasions and that figure stayed the same as last year. The number of visits from Asian countries continued to grow, with 15% more visits taking place in the second quarter of this year than a year ago. Visits from the USA and Norway have also become more frequent, while visits from Turkey and Belarus have decreased in number.

The number of overnight visits grew by 6% in the second quarter compared to the same time last year, and the average length of an overnight visit was four days. 48% of all visits were same-day trips. Foreign tourists spent an estimated 390 million euros in Estonia in the second quarter, which is 5% more than in the second quarter of 2015.

Estonian residents made almost 950,000 trips to foreign countries in the second quarter, which was 1% more than a year earlier1.Estonian residents visited all neighbouring countries slightly more often than in the second quarter of last year, but the number of trips made to Belgium, France and Italy fell by more than 10%.

The holiday destination preferences of Estonian people have changed: the number of trips to Turkey fell by one third, while visits to Greece, Bulgaria and Croatia became significantly more frequent.

The number of overnight visits remained the same, and the average length of one such visit was 3.6 days. Same-day trips accounted for 15% of the total, and they increased in number by 6%.

Estonian tourists spent an estimated 185 million euros abroad in the second quarter.

1 The number of trips abroad and the number of foreign countries visited are not the same, as one trip abroad may include visits to several different countries.

The movement of travellers has a noticeable effect on the export and import of travel services in the Estonian balance of payments, which will be published on 8 September.

Source: Bank of Estonia

The price level in July remained unchanged

  • External environment price pressures remain weak, although some commodities have become more expensive
  • Oil price, which has a major impact on the cost of the consumer basket, went down again in July
  • Domestic price growth in Estonia has slowed despite the fact that retail and wages have grown relatively fast

Data from Statistics Estonia show that the consumer price index did not change in July. Compared to July 2015, the price level dropped 0.1%. Growth in the harmonised consumer price index of the euro area accelerated in July from 0.1% to 0.2%. The price pressures in the external environment are still weak, although the global prices of some commodities have turned upwards. Over the past few months, food prices have gone up primarily for sugar. The market outlook for this year’s harvest has been positive and this is expected to rein in food price inflation. However, the price of crude oil fell again in July after six months of positive growth. The oil price significantly affects the cost of the consumer basket, as it has an impact on other energy sources, such as heat, as well as many services.

Core inflation (i.e. manufactured goods and services), which is mainly dependent on domestic factors, has slowed down to 0.4%, even though retail sales volumes and wages have continued to grow relatively quickly. Year-on-year, the prices of manufactured goods grew in July on account of clothing and footwear, as seasonal discounts were smaller this year than the year before. The growth in service prices, which was previously supported by rising rent prices, has dwindled in the past months. The consumers’ inflation expectations and sentiment indicators are low, which makes it harder for companies to raise their prices. This puts a damper on the growth of consumer prices.

Eesti Pank forecasts moderate inflation for the second half of the year. As past months have seen falling prices, it may be assumed that the average annual price level will not change compared to last year.

Source: Bank of Estonia

Author: Rasmus Kattai, Economist at Eesti Pank

See graphs here


Get every new post delivered to your Inbox.