Merchandise trade deficit expands by 34.1% y/y in Estonia

Estonia’s merchandise trade deficit expanded by 34.1% y/y to EUR153m in June, according to figures of the statistical office, published on Thursday. Export growth accelerated tangibly from 8.1% y/y in May to 16.7% y/y in June, signaling for strong demand among Estonia’s trade partners. The top destination countries of Estonia’s exports were Finland (15% of total), Latvia (11%) and Sweden (10%). The biggest increase was marked by exports to the USA (up by EUR52m), Singapore (up by EUR42m) and Latvia (up by EUR41m). Regarding commodity groups, the largest share in exports was held by electrical equipment and mineral products (16% of total each), followed by wood and articles of wood (11%). The greatest increase during the month was registered by the exports of mineral products (up by EUR77m), wood (up by EUR25m) and electrical equipment (also up by EUR25m).

Meanwhile, import growth also picked up notably from 11.6% y/y in May to 18.3% y/y in June as domestic demand remains solid, partially underpinned by rising wages and favorable lending conditions for households. Estonia’s key import partners in June were Finland (13% of total), Lithuania and Germany (10% of total each). The main imported commodities were mineral products (18% of total), electrical equipment (14%) and transport equipment (11%). The greatest increase was recorded in the imports of mineral products (up by EUR153m), electrical equipment (up by EUR20m) and mechanical appliances (up by EUR17m).

In cumulative terms, the merchandise trade deficit in H1 narrowed by 3.4% y/y to EUR1.1bn. Meanwhile, the trade deficit in Q2 amounted to EUR536m, up from EUR452m registered in Q2 2017. Export growth in Q2 was mostly supported by mineral products and wood, while import growth was mainly affected by an increase in the imports of mineral products, electrical equipment and mechanical appliances.

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