Merchandise trade deficit widened by 13.0% y/y to EUR159.2m in October, data of the stat office showed on Monday. Imports rose by 10.9% y/y, aided by further increase of private consumption, which is underpinned by high employment and consumer confidence, as well as by the strong wage growth. Imports of mineral products increased by 61.8% y/y, reflecting low base effect. Imports of base metals rose by 21.3% y/y, boosted by the stronger growth of industrial output. Machinery imports rose by 2.9% y/y. This is in line with our expectation that GCF growth will continue to contribute positively to the GDP growth in Q4. Still, its contribution should be lower than in the previous quarters. The main import partners were Finland and Germany with 15% of imports.
Exports rose by 10.7% y/y, following 0.9% y/y contraction in September. Base metals exports increased by 50.1% y/y. Other significant growth rates were registered by chemical products (29.8% y/y), wood (23.4% y/y) and vehicles (15.0% y/y). As far as the export destinations are concerned, exports to Finland increased by 18% y/y, underpinned by the economic growth in the country. As a result, the exports for the country comprised 17% of all exports and it remained Estonia’s biggest export partner. Sweden remained Estonia’s second biggest export partner, although exports to its declined by 18% y/y which is likely due to lower exports of mobile equipment. At the same time, exports to neighboring Latvia and Russia rose by 9% y/y and 8% y/y, respectively, boosted by the stronger economic activity in these two countries.
In regards to the cumulative figures, the merchandise deficit widened by 20.5% y/y to EUR 1.6bn in Jan-Oct, representing 7.2% of GDP. Imports rose by 9.6% y/y due to significant increase of investments and further rise of private consumption. On the other hand, exports rose by 8.1% y/y, influenced by the strengthening external demand.