Global trade was relatively lively at the start of the year and demand in Estonia’s trading partners was also improving. The war that started between the USA and Iran at the end of February increased uncertainty though, and caused supply problems in goods markets. This slowed the growth in demand, which then affected the performance of Estonia’s foreign trade as well. Data from the balance of payments show that the turnover of exports and imports of goods and services grew by 2.8% in the first quarter, with exports growing by 2.6% and imports by 3%.

The growth in exports of goods at the end of last year occurred in several important groups of goods, but although the turnover of exports continued to increase at the start of this year, the growth was more modest. Groups of goods related to manufacturing such as machinery and equipment, electrical equipment, and metal and metal products supported the improvement in goods exports. The largest growth in the first quarter was in the turnover of exports of goods to Latvia and Sweden. The largest average growth over the year was in exports to Poland, Germany and Lithuania, and Estonian businesses have increased their share of those markets. The Finnish market continues to recover slowly, and the turnover of goods exported to it has increased a little since the start of the year. Data from the balance of payments indicate total growth of 2% in exports of goods in the first quarter.

An increase in the stock of goods for national defence, investment in defence, and a general revival in domestic demand all boosted imports of goods. The turnover of imports of goods was 4% more in the first quarter than a year earlier, and the biggest contributors to the growth were imports of machinery and equipment, and of electronics.

The turnover of exports of services grew by 4% in the first quarter, which was a little lower than a year earlier. The main driver of the growth was business services, as exports of them increased by 19%. Exports of travel services were 5% more than a year earlier, but there were declines in exports of computer services and transport services. A trend  can be observed over the past few quarters in transport services, with exports of maritime transport increasing and those of road transport decreasing. Road transport provides about a third of the turnover of exports of transport services and maritime transport about a quarter.

The balance of payments showed the current account to have been 148 million euros in deficit in the first quarter, or 1.4% of GDP. The current account deficit was smaller than at the same time last year as the deficit on the goods account was larger but was offset by an increase in the surplus on the services account.

Assessments by companies of their own competitiveness improved at the start of the year as the risks to the global economy were in balance. The assessments were less positive in the second quarter though but were still better than they were last year. The outbreak of another war has increased uncertainty in the global economy though and this affects how competitive Estonian companies are through various price channels.

Contact:
Evelin Jürisson
Communications Specialist
Eesti Pank
+372 668 0965
Press enquiries: [email protected]