Estonia Producer Prices Tick-up Again in June

Estonia's Producer Price Indices increased again in June. According to Statistics Estonia, in June 2008 the producer price index was up 0.4% month on month (compared to May) and 7.5% Year on year (compared to June 2007). This is up from 0.2 and 7.2 respectively in May.



The month on month cahnge in the producer price index was mainly influenced by the increase in prices in the manufacture of electrical and optical equipment and in the manufacture of textiles and textile products. Compared to June of the previous year, prices increased most in the manufacture of food products and beverages.


In June 2008 the percentage change in the export price index was 1.1% compared to May 2008 and 5.2% compared to June of the previous year, while the percentage change in the import price index was 2.8% compared to May 2008 and 8.7% compared to June of the previous year. This move in export prices does not bode well for the export outlook, especially being pegged to such a hard currency as the euro at this point.

Estonian Inflation Rises Back Again in June 2008

According to the Estonian statistics office annual consumer price inflation in June 2008 was 11.4%. This is now the six consecutive month for which the consumer price index has remained around the 11% region.



Food prices were up by 15.8% and the price of manufactured goods by 7.0%. The services iprices ncreased 12.5%. Regulated prices of goods and services were up by 22.0% and non-regulated prices by 8.5%.

As in the previous months, the index was largely influenced by the increased price of food and housing, as well as by the increase in petrol prices. Dairy-, cereal- and meat products made up four fifths of the price increase of food. The increase in housing costs was mainly the result of an increase in the price of heating. Three quarters of the 14.7% price increase in the transport index was the direct result of the increased fuel cost.

The price of goods and services in June were 0.6% higher than in May. The monthly rise was mainly produced by the increase in fuel prices which was responsible for two thirds of the monthly change in the consumer price index.

Sharp Slowdown In Latvian Industrial Output in May 2008

Well the May industrial output reading is really quite a shocker, since when compared to April 2008, industrial output in May 2008 at constant prices (i.e. allowing for the influence of the price change) was down by 3.1%, according to the (seasonally adjusted data) accoring to the Latvian Central Statistical Bureau. Of this there was a volume decrease of 3.3% in manufacturing, 3,4 % in electricity, gas and water supply, and in mining and quarrying the production volume was up by 7.1%.



Compared to May 2007, industrial output in May (according to working day adjusted data) was down by 8.5%. Of which there was a volume decrease of 8% in manufacturing, a 9,6 % decrease in electricity, gas and water supply, and a 3.1% increase in mining and quarrying.




According to the statistics bureau the decrease in industrial production is related to a drop in demand and a decrease in orders in the following economic activities: food, textiles and wearing apparel, manufacture of wood, paper products, printing, chemicals and chemical products, rubber and plastic products, construction materials and furniture.

I don't know where all the people are right now who were predicting a "soft landing" (in hiding to conceal their shame I hope, or at least doing public "mea culpas" and correcting the flaws in their methodologies), but it really does look as if the Q2 2008 GDP result could be something of a shocker, if the Industrial Output readings and the retail sales data are anything to go by.



The only saving grace at this point would appear to be external trade, and this could be more of a positive element due to the statistical impact of the slowdown in import growth (caused by the drop in domestic demand) rather and real robustness in exports. Still the May 2008 extrenal trade data is due out next week, and at that point we should get a much better idea.

Exports werte up a healthy 24.7% year on year in April.



Although it is important to remember that Latvia still runs a substantial trade deficit dèspite some recent improvement.

Estonia Industrial Output May 2008

Estonia's industrial production fell the most in nine years in May, providing us with the latest evidence (following yesterday's retail sales data) that the Baltic economy has slipped into what now seems likely to become a pretty deep recession. Output, adjusted for working days, decreased an annual 6.7 percent, the biggest decline since May 1999, compared with a revised 0.1 percent fall in April, according to data from the Estonian statistics office released today. Production fell a monthly 4.8 percent on a seasonally adjusted basis.



Industrial output, led by food production and wood procession, has now fallen for three straight months.