The merchandise trade deficit narrowed down by 37.3% y/y to EUR104.7m in May, according to figures of the statistical office, published on Tuesday. Export growth accelerated to 8.3% y/y, surpassing import growth, which came in at 2.9% y/y, down to its lowest growth rate since January this year. Key countries of export were Finland, Sweden and Latvia with significant increase registered in exports to Spain, the Netherlands and Norway, boosted by mineral and wood products.
Main partners regarding imports were Finland, Germany, Sweden and Lithuania. Imports from Sweden, Lithuania and Russia increased most tangibly, with the latter affected by imports of raw minerals and chemicals. Looking at the goods categories, the largest share in terms of exports was held by electrical equipment, mineral products, wood and mechanical appliances. Meanwhile, the main commodities imports to Estonia were electrical, transport equipment, mineral products and mechanical appliances.
Looking ahead, we overall expect that Estonia’s merchandise trade balance is likely to deteriorate in 2019, given expectations for moderating demand among trading partners, while on the other hand domestic demand is expected to remain relatively strong, boosted by labor market developments and favorable lending conditions.