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Thursday, March 27, 2008

Estonia Foreign Trade January 2008

Estonia's trade deficit narrowed in January, reaching its lowest level in almost two years. A large part of the reduction was a result of a rapid drop in imports - which fell year on year by 4% in January, and this undoubtedly reflects the rapid contraction in internal consumer demand, but exports did also bounce back nicely, although the level of growth - at 4% - was still well below the 12% year on year growth rates achieved in October and November.

Basically the rather volatile nature of Estonian exports makes it hard to draw any worthwhile lasting conclusions at this point, other than to note that the improvement in the trade balance will impact positively on GDP.

In January 2008 exports reached a value of 10.1 billion kroons and imports 13.2 billion kroons. Compared to January 2007 the value of exports rose 4% and imports fell 4%. The trade deficit was 3.1 billion kroons. Compared to January 2007, the trade deficit decreased by about a billion kroons.

In January 2008 the export share of EU countries was 75% and the share of CIS countries 10%. The most important export partners were Finland, Sweden and Latvia, which collectively accounted for 46% of total exports. Exports to the EU countries increased by 1.1 billion kroons when compared to January 2007.

The import share of the EU countries was 79% and that of CIS countries 12%. The most important partners in import terms were Finland, Germany and Sweden, which collectively accounted for 38% of the total imports. Imports from the EU countries increased by 272 million kroons when compared to January 2007.

The foreign trade deficit with the EU countries decreased from 3.8 billion kroons to 3 billion kroons compared to January 2007. Compared to January 2007, the trade deficit with the CIS countries dropped from 1.5 billion kroons to 0.6 billion kroons. The biggest trade surplus was achieved with Norway (247 million kroons) and Sweden (98 million kroons). The biggest trade deficit was with Germany (1.0 billion kroons), Russia (484 million kroons) and Lithuania (282 million kroons).

In both exports and imports the most important commodity section was machinery and equipment (the share 20% of exports and 21% of imports). Compared to January 2007, the greatest increase in exports was in the metals and products thereof (62%), transport equipment (20%) and agricultural products and food preparations (19%). The exports of mineral products decreased significantly (42%). The imports increased in the sections of raw materials and products of chemical industry (12%) and agricultural products and food preparations (10%). Among other commodity sections the imports decreased. The biggest decline in imports was in the section of wood and products thereof (18%) and paper and articles thereof (18%).

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