The merchandise trade deficit widened by 9.1% y/y to EUR94.9m in February, according to figures of the statistical office. Export growth eased down tangibly to 4.2% y/y and was mainly supported by exports of wood, articles of wood and prefabricated wood buildings. Estonia’s key trading partners during February were as traditionally Finland (15% of total), Sweden (11%), Latvia (8%) and the U.S. (8%). The most considerable decrease occurred in exports to the United Kingdom, due to a decline in the exports of mineral products, while on the other hand the most notable increase occurred in exports to the U.S., the Netherlands and Turkey. In terms of commodity groups, the biggest share in exports was held by electrical equipment (15% of total), mineral products (14%) and wood (12%).
Meanwhile, import growth picked up to 4.5% y/y in February, after easing down to 2.5% y/y in January. The main partners were again Finland (12%), Germany (11%) and Sweden (10%). The most significant decline was registered by imports from Belarus as imports of mineral products decreased in nearly half. The key commodities imported to Estonia were electrical equipment (13%), mineral products (12%) and transport equipment (11%).
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.