The merchandise trade deficit fell by 11.2% y/y in March, according to figures of the statistical office, published on Friday. Export growth accelerated to 7.6% y/y following the deceleration observed in February but the rate of increase is still somewhat subdued compared to previous months. Imports on the other hand maintained their growth of 4.8% y/y which remains significantly lower compared to the figures observed at end-2018. In cumulative terms, the deficit in Q1 remained unchanged from a year ago at EUR390m with exports rising by 8% y/y while imports went up by 4.1% y/y.
Looking at the goods categories, exports in Q1 rose all across the board with the highest contribution coming from exports of machinery and wood while on the imports side, the highest contribution to growth came from chemical products and base metals with machinery imports being the only category where imports fell.
Looking ahead, we expect that Estonia’s merchandise trade balance is likely to deteriorate this year, given expectations for moderating demand among its key trading partners and the overall slowdown of growth in Europe, while on the other hand domestic demand is expected to remain relatively strong.