Alongside the strong exports of goods, exports of services grew for the first time in a long time
Economist at Eesti Pank
Estonia’s foreign trade turnover grew for the second quarter in a row. This was supported by increased economic activity in international goods markets. The economies of Estonia’s trading partners are improving at quite different rates and the recovery in demand is cautious, but Estonian exports have returned to their pre-crisis volumes. Goods exports have also become increasingly broadly based.
Exports of goods produced in Estonia grew for the second quarter in a row. Despite the sluggishness of demand, exports of goods were up by 6.5% in the first quarter, and exports of services were up by 2.2%. Goods exports were again supported by sectors that make an important contribution to value added, such as wood products and electricity. Demand for such products was affected in the first quarter by the relatively cold weather. Exports were also supported by mineral fuels and metal products.
Having fallen for four quarters, exports of services started growing. The increased activity in the goods market meant that exports of transport services also recovered. The stable growth seen last year in exports of telecommunications and computer services continued in the first quarter, and exports of other business services also increased. Travel services remained in the doldrums in the first quarter. Services exports were up by 2.2% in total in the first quarter. Services imports were affected most by a large-scale purchase of computer software that also increased the total turnover of foreign trade.
The current account was in deficit in the second quarter by 4.7% of GDP, which was affected most by extraordinary transactions in imports of services. The balance of the financial account was negative for the second consecutive quarter, as large-scale direct investment in Estonia meant that more financial assets were put into the Estonian economy from abroad than were sent there from Estonia.
Businesses are now better adjusted to the changed circumstances than they were last spring. Confidence about orders in manufacturing has also improved in Europe. Experts estimate that global trade will recover from the crisis this year and will reach its level of 2019. The outlook for Estonian exporters in the second half of the year is good. This is confirmed by the foreign trade statistics for April that were released today.
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