Foreign demand from Estonia’s trading partners recovered gradually in the first half of the year, though at a slow pace that varied between countries. As demand recovers, so Estonia’s exports of goods are emerging from the long slump. Total turnover of goods exports in the second quarter was a little lower than a year earlier, but some increase in turnover is apparent within groups of goods.

The turnover of Estonia’s foreign trade was at the same level as a year earlier in the second quarter, and it appears that the long decline is ending. Data from the balance of payments show that the turnover of exports of goods was down 3% in the second quarter, while the turnover of imports was down 1.6%. The turnover of exports of services was up by 3.5% though, while the turnover of imports of services was up 2.8%.

Demand from trading partners is returning gradually, and including the monthly statistics for goods exports shows that the turnover of exports was quite volatile in the second quarter. Goods exports performing better than previously indicates that the sectors that are most important for the turnover of exports have started to grow, though there was a setback in the early summer. The turnover of exports of wood products and machinery and equipment fell in May and June for example. The statistics for July again showed growth in the turnover of exports in all the main groups of goods. This means that manufacturing is still in quite a precarious position, but the enduring difficulties are by now in the past. The economic performance of Estonia’s main trading partners has been equally variable. There were signs at the start of the year of growth recovering in Germany, but the message from there more recently has not been as positive. Things have perked up in Scandinavia, and particularly strongly in Sweden, and also a little in Finland. Exports to Russia have fallen even further.

Exports of services continued to grow moderately and were up 3.5% on the year. Demand was particularly good for information and communications technology, which is one of the largest groups of services, where exports were up by 14%. The turnover of exports of travel services increased by 9%, while exports of transport services grew for the first time in a long time, gaining 8%. Exports of other business services were down by 8%, which affected total turnover as they provide around a third of total exports of services.

The sluggish performance of the economy in general is also reflected by imports of goods and services, as the turnover of imports was about the same in the second quarter as it was a year earlier. Imports of goods are affected a lot by manufacturing and the need to import inputs for it. The growth in the imports of machinery and equipment played a significant part in the second quarter, while the continuing decline in imports of fuels has not entirely ceased. The turnover of imports of services increased a little in the second quarter, though this has been happening quite steadily for four quarters by now.

The current account deficit was 170 million euros in the second quarter, or 1.7% of GDP. The surplus in services continued to bolster the current account.

Some improvement was seen in the first half of the year in the estimates by businesses of their economic position both for export orders and for competitiveness. The more optimistic stance was more in evidence at the start of the year. The outlook of companies was essentially the same in the summer months, and their opinions did not notably change in the second quarter for better or for worse.

See also the statistical release on the balance of payments and international investment position for the second quarter of 2024.

Additional information:
Hanna Jürgenson
Communications Specialist
Eesti Pank
Tel: 5692 0930
Press enquiries: [email protected]