The merchandise trade deficit narrowed by 7.6% y/y to EUR170.9m in April, according to figures of the statistical office, published on Monday. Exports jumped sharply, up by 16.3% y/y, after they dropped by 3.2% y/y in March. Figures show that demand among Estonia’s trading partners is still strong. The top destination countries of Estonia’s exports were Finland (16% of total), Sweden (12%) and Latvia (10%). The largest share in exports was held by electrical equipment (15% of total), mineral products (13%) and wood (11%). In annual terms, the greatest increase was registered by mineral products, mechanical appliances and transport equipment.
Meanwhile, import growth also quickened tangibly to 12.7% y/y, up from 3.8% y/y in March. The acceleration was likely driven by strong domestic demand. On the one hand, it was driven by household consumption, fuelled by rising wages and on the other hand, it was underpinned by investment activity. The main imported commodities were electrical equipment, mineral products, mechanical appliances and transport equipment. Estonia’s key import partners were Finland (14%), Germany (11%) and Sweden (10%).
In cumulative terms, the merchandise trade deficit narrowed by 15.3% y/y to EUR709.5m in January-April 2018. Exports picked up their growth to 8.9% y/y, while import growth accelerated to 8.1% y/y. Looking forward, some slowdown of export growth might be expected in the near term, due to expectations of moderating demand across the Eurozone. In addition, the slowdown of construction growth in the Nordic countries could lead to an ease of demand for wood and wood products, which traditionally account for a large share of exports.