Flash comment: Estonia - July 9, 2015
Foreign trade turnover decreases
In May 2015, the turnover of exports of goods of Estonia decreased by 6% and imports by 10%, year on year. After the first five months, exports’ turnover has declined by 1% and imports’ turnover by 5%, year on year. Export sales to Russia have declined by around 50%, year on year, during the first 5 months of this year, while exports to other markets have increased modestly (+4%, yoy).

One reason behind a decrease in the turnover of foreign trade has been a fall in output and input prices. Export prices in the Estonia’s manufacturing sector have declined by 4% and import prices by 3% (5 months data). A decline in prices has been caused by modest demand on world’s markets as well as an oversupply of commodities.

Among Estonia’s main export articles, export volumes of mobile network devices (Estonia’s main export article), wood products, furniture, various optical and other instruments, and metal products are on the rise. The export volumes of construction machinery (bulldozers, etc.; transit goods from Western Europe to Russia), milk, vodka (Russia one of the main markets) and petroleum oils (partly transit goods from Russia to other parts of the world) have decreased substantially. The share of Russia in Estonia’s exports of goods and services has decreased from 10% in 2013 to 5% in the first quarter of 2015.

Sentiment among Estonia’s manufacturing industry has remained relatively stable throughout this year, according to a survey of the Estonian Institute of Economic Research, published yesterday, although demand on export markets is below historical average. Manufacturing enterprises expect their sales, prices, and the number of employees to stay at current level. Managers in the industry perceive the Russia/Ukraine conflict and Greece as main risks surrounding the outlook.

For more information about this report, please contact Ms. Liis Elmik, liis.elmik@swedbank.ee, +372 888 7206
This letter is distributed by Swedbank in cooperation with Brightly. The letter is personal.