Merchandise trade deficit expands by 61.2% y/y in Estonia

Estonia’s merchandise trade deficit expanded by 61.2% y/y to EUR155.1m in August, according to figures of the statistical office, published on Wednesday. In cumulative terms, the merchandise trade deficit in the period January-August narrowed marginally by 3.5% y/y to EUR1.3bn.

Back to August figures, export growth decelerated tangibly to 7.1% y/y, after it peaked at 26.8% y/y in July, signaling for somewhat more moderate demand among Estonia’s key trading partners. The top destination countries of Estonia’s exports in August were Finland (17% of total), Sweden (11%) and Latvia (11%). The biggest decrease occurred in exports to Russia — down by EUR13m), driven by lower exports of raw materials and products of the chemical industry. Regarding commodity groups, the biggest share in exports was held by electrical equipment and mineral products (15% each), followed by wood and articles of wood, miscellaneous manufactured articles and mechanical appliances (9% each).The most significant increase during the month was registered in the exports of mineral products, mechanical appliances, raw materials and products of the chemical industry.

Meanwhile, import growth also slowed down notably to 11.4% y/y in August, down from 17.2% y/y in July, hinting at somewhat easing domestic demand. Estonia’s key import partners in August were Finland (12% of total), Lithuania and Russia (11% each). The biggest increase occurred in imports from Russia, which went up by EUR 72mn, Belarus — higher by EUR26m and Lithuania — up by EUR26m, with the imports of mineral products increasing the most for each country. The main imported commodities during the month were mineral products (16%), electrical equipment (13%) and mechanical appliances (10%). The greatest increase was in the imports of mineral products (up by EUR91m) and products of the chemical industry (up by EUR23m).

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