The spread of the coronavirus and the resulting restrictions, together with the general cooling of the global economy that started in the second half of last year, have pushed the trend for Estonian foreign trade downwards. Exports of goods were down by 3.8% and imports of goods by 3.5% in the first quarter of the year. Exports and imports of services were also down in March, though in the quarter as a whole exports of services were up by 2.9%.

Trade in services revealed a drop in volumes of travel and transport services from March. These sectors were affected the most by the restrictions introduced because of the spread of the coronavirus in the early phase of the crisis. There was also strong growth at the start of the year in several sectors that are important for Estonia’s exports of services, such as telecommunications and information services, repair and maintenance services, and financial services. The surplus on the current account reached 3.9% of GDP in the first quarter, and it was again built on the surplus on the services account.

The international market for goods has been affected broadly by the coronavirus crisis. Flows of goods were first hampered at the start of the year by problems in supply chains. Temporary stoppages in the activities of companies caused by the restrictions have reduced orders, and demand is down. These problems are reflected in the numbers for the trade in goods of Estonian companies in the first quarter. Export volumes fell in the five largest groups of goods, as they were down 12% in electrical and mechanical equipment, 15% in mineral products, 6.6% in wood and wood products, 1% in miscellaneous industrial goods, and 0.2% in metal and metal products. These groups of goods together accounted for a little below two thirds of total exports of goods, which means that exports fell broadly in the first quarter, but not very deeply.

The economic crisis caused by the coronavirus pandemic is still unfortunately only in its initial phase and its impact on the balance of payments accounts will be more evident in the second and third quarters.

Eesti Pank publishes an economic policy comment on external sector statistics, together with a statistical infographic on the balance of payments that covers changes in the current and capital accounts, the financial account, the international investment position, and the external debt.

Additional information:
Hanna Jürgenson
Eesti Pank
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