Latvian Retail Sales May 2008

Well the statistical anomalies produced by the ealy timing of easter now seem to be working themselves out, and the data are getting back towards normality, which means that Latvian retail sales (working day corrected) were down by 5.1% year on year in May, and by 2.4% (seasonally adjusted) over April. Nothing more to say on this really, other than to be continued....




While I am here, the EU Economic Sentiment Index for June has now been published, and here is the principal chart for the Baltic countries.


Latvia seems to have now overtaken Estonia on the downward charge, with Lithuania still some way behind, evn if it is catching up fast.

Estonia Producer Prices May 2008

According to Statistics Estonia, the Estonian producer price index was up 0.2% in May in comparison with April and 7.2% when compared with May 2007. Changes in the producer price index in May were mainly influenced by an increase in the prices of building materials and in the manufacture of rubber and plastic products. Compared to May 2007 the prices increased mainly in the manufacture of food and beverages.




In May 2008 the export price index was effectively stationary when compared to April 2008 and rose by 4.3% compared to May 2007.Month on month the export price index was mainly influenced by an increase in the prices of chemical products, rubber and plastic products and metal products and by a decrease in the prices of peat and peat products, food, textile products and wood and wood products.

In May 2008 the percentage change in the import price index was 1.5% compared to April 2008 and 6.2% compared to May 2007. Month on month the import price index was mainly influenced by increases in the price of mineral fuels, chemicals and chemical products and metal products and by a decrease in the price of agricultural products and of wood and wood products.



Interestingly, at least in the tradeables sector, Estonia is no longer exporting inflation, but rather importing it, since the rate of price increase in exported goods is now below the rate for imported ones.

Estonia Foreign Trade April 2008

Some good news from Estonia for a change. In April 2008 Estonian goods exports were up sharply, to 12.2 billion kroons during the month. Compared with April 2007 the increase in exports was 1.8 billion kroons or 18% in nominal (non inflation adjusted) prices. The main increases were in metals and products thereof and of machinery and equipment.

Goods imports of goods ran to 15.8 billion kroons, which was 0.2 billion kroons or 2% up on April 2007. One of the main reasons of the slowdown in the growth of imports was the decrease of imports from Russia by nearly one billion kroons (45%).



The trade deficit in April was 3.6 billion kroons. Compared to April 2007, the trade deficit was down by 1.6 billion kroons — mainly caused by the faster growth of exports than of imports.




In April 2008 EU countries had 69% share in the export destinations, while the share of CIS countries was up to 18% of the total exports (in the previous year these figures were 70% and 11%, respectively). Compared to April 2007, exports of goods to EU countries increased by 1.1 billion kroons (15%), and to CIS countries by 0.3 billion kroons (27%). The main destination countries were Finland, Sweden and Russia.

Exports to Latvia were down 20% and to Russia up by 23%.

In total imports the share of the EU countries was 82% and that of CIS countries 13% (in the previous year the figures were 77% and 16%, respectively). Imports from the EU countries increased by over a billion kroons (9%), at the same time imports from CIS countries decreased by 0.8 billion kroons or nearly by one third. The biggest increase (0.3 billion kroons) was announced in imports from Lithuania. The most important sources of imports were Finland, Germany and Sweden.

In both exports and imports the most important section was machinery and equipment which accounted for around one fifth of the both flows. The largest increase in imports was for raw materials and chemical industry products, machinery and equipment and metals and products thereof.

Estonia GDP Q1 2008 Revised Data

Estonia's economy effectively stagnated on a year on year basis in the first quarter of 2008, recording in annual terms the slowest rate of growth since the contraction in the third quarter of 1999, as both consumer spending and exports fell.

Gross domestic product rose a revised annual 0.1 percent in the first three months of 2008, compared with a preliminary 0.4 percent reported on May 14 and 10.1 percent annual growth rate a year earlier, according to the Tallinn-based Statistics Office said on today.



Adjusted seasonally and for working days, the economy shrank 0.5 percent from the fourth quarter.




Estonian economic growth, which was the fastest in the European Union in the second quarter of 2006, is now the slowest and may well already be in recession. Accelerating inflation, slumping consumer confidence and tighter lending have all helped stall retail sales, squeezed manufacturers and cooled the housing market after a spending and investment boom which really got started after Estonia joined the EU in 2004.

``A hard landing scenario has already materialized in the Estonian economy,'' Lars Christensen and Violeta Klyviene, economists at Danske Bank A/S,said ``We expect a negative growth performance in 2008 and only marginal improvement in the next year.''

The International Monetary Fund said last month that Estonia's economy may contract this year and the government will have to ``significantly'' cut spending in coming years balance the budget.

Consumer spending shrank 0.4 percent in Q1 2008 from a year earlier, led by lower spending on transport, clothing and alcohol and tobacco, the statistics office said. Exports fell 5.4 percent, mainly due to a decline in Russian oil shipments and related sea and railway cargo transport services.

Russian oil shipments through Estonia have fallen by a third since May 2007 after a Soviet war memorial was removed from Tallinn's city center, sparking protests from some members of Estonia's Russian-speaking minority and the Russian government.