Economic News

14 January (BNS)

In a statement released on Friday, the Standard & Poor’s rating agency confirmed the Estonian country rating at the present high level of AA-, the Finance Ministry said. Due to debt crisis risks, the outlook of the rating is negative, the agency said.

The agency said the reasons for the high rating were Estonia's politically stable environment, effective control of public sector expenditures, and low debt burden, as well as a flexible private sector, all of which help manage negative influences from the external environment. The possibility of the weakening of the European and euro zone economies is seen as the main risk in the country rating.

Finance Minister Jürgen Ligi agreed with Standard and Poor's assessment concerning Estonia's achievements as well as the main risks for the economy. But Ligi said that it was questionable whether the rating agency's more general messages were unambiguously understood and justified.

"It is difficult to see how fiscal consolidation could threaten Europe's economic growth compared with the mistrust caused by slack budgetary policy," Ligi said. "Trust, a stable economic environment, and well-organised state finances will remain the most important requirements for the restoration of sustainable growth."

"Naturally people deal with the issues of competiveness and structural reforms in Europe, but this does not mitigate the need for the organisation of state finances," the minister added. "The euro zone already seems to be considerably stronger than the economies of some big countries, and reforms in both the member states as well as on the European level are moving in the right direction."
Standard & Poor’s raised Estonia’s country rating to the level
AA- on 9 August 2011.
 

11 July (BNS)

The growth in Estonian exports will slow down in the latter half of the year, analysts of LHV Pank and Nordea believe. Commenting on foreign trade figures for May, chief economist of Nordea Pank Tõnu Palm said that the external environment, including that of manufacturing, was weaker in the second quarter than at the beginning of the year. "Export statistics confirm that vigorous growth in the export of goods from Estonia continued in the second quarter, but deceleration of the annual rate of growth in the second half of the year from the previous high levels is in the cards."

Palm said May was another month of strong export for Estonia considering that the export of goods has grown steadily in monthly comparison even after the record jump above the one billion euro level in March. "Export growth was broad-based," he observed.

Businesses predict an increase in export volumes in coming months, but like in previous months we shall probably see a drop in growth rates," analyst of LHV Pank Nils Vaikla told BNS. In Vaikla's words, the small trade shortfall recorded in May shows that export-driven economic growth continued strong in the second quarter as well.

Estonian export volumes rose to new record levels in May on the coattails of strong external demand or mainly thanks to Estonia's main trade partners Finland and Sweden, the analyst said. "By growth rates, export to Sweden and Russia increased the most, showing a year-on-year growth of respectively 71% and 62%. With total exports surging 53% in May, machinery and equipment accounted for a third and mineral products or fuel and electricity for another third of the growth," Vaikla said.

"Trade growth rates on both the import and the export side have noticeably declined over the last couple of months, but that is mostly due to an arithmetical inevitability," chief economist of SEB Pank Hardo Pajula said.

In May the export of goods from Estonia at current prices increased by 53% and imports grew by 44% compared to the same month last year, the national statistics agency said on Monday. Due to a faster growth in exports than in imports, the trade deficit decreased and the gap in May was the smallest recorded this year. Month on month, exports increased by 1 % while imports decreased by 2%.

In May 1.12 billion euros' worth of goods was exported from and 1.14 billion euros' worth imported into Estonia. The export turnover exceeded the highest result so far or the turnover of April this year. The trade shortfall in May was 24 million euros compared to the year-earlier 62 million euros.
 

15 August (BNS)

Works will begin at Estonia's Sillamäe Port, where a general cargo and container terminal to be built, the business daily Äripäev wrote.

"A well-developed oil products and liquid chemicals terminal has been developed at Sillamäe Port. The time has now come for an up-to-date general goods and container terminal and we have pressed the investment button," said Tiit Vähi, former major owner of Silmet and chairman of the supervisory board of Sillamäe Sadam AS.

The building of a container and general goods terminal at a total cost of 30 million euros will start in August. On Friday a 20 million euro building contract for the second phase of the port infrastructure was signed.

East-West transit goods make up 95% of the goods moving through the port and local goods, or those moving in the north-south direction, make up 5%. "We co-operate with all those who want to carry container or general goods or oil products between Russia and Europe or between CIS countries and Europe," Vähi said about the future.
 

6 January (BNS)

Estonian Air carried a total of 678 049 passengers during 2011, 16.4% more than in the year before.

The number of passengers carried during December was 44 541, marking an improvement of 4% over December 2010, the airline said on Friday. Rauno Parras, commercial manager of Estonian Air, said the growth in passenger numbers in 2011 was significant considering the uncertainty of the European economy. "Bookings for 2012 indicate similar growth figures," Parras said.

During the year Estonian Air operated 11 691 flights, 11.5% more than in 2010. In December 883 flights were operated, an increase of 16.1% year on year.

Estonian Air currently flies to 25 destinations in CIS, Scandinavia and Europe, and has recently announced a number of new destinations for the summer season.
 

11 August (BNS)

The 8.4% annual growth of Estonia's gross domestic product in the second quarter surpassed analysts' expectations. Analysts of Estonian commercial banks predicted the quarterly GDP growth would be 6.5-7%.

LHV Pank analyst Nils Vaikla told BNS on Thursday that the GDP continued to show robust growth in the second quarter that beat both consensus expectations and the bank's 7% growth forecast.

"Although the quarterly and seasonally adjusted growth figure was slightly smaller than in the first quarter, the strong recovery of the economy continued supported by export and domestic demand growth. The drop in unemployment improves the financial state of households, thanks to which economic activity in other fields besides exporting manufacturing has picked up, meaning economic
growth has become more varied than before," Vaikla said.

Swedbank's macro analyst Annika Paabut said that GDP growth in the second quarter was led by net export and domestic demand. "We assume that domestic demand has picked up on account of tourists visiting Estonia, who readily spend money here."

Economic growth factors can be dissected in greater detail on 8 September when Statistics Estonia will release detailed figures for the second quarter, she added.

According to the flash estimate the statistics agency published on Thursday the gross domestic product of Estonia increased by 8.4% year-on-year in the second quarter of 2011. Compared to the first quarter, the seasonally and working-day adjusted GDP grew by 1.8%.

Estonia's GDP increased by 8.5% year-on-year in the first quarter of the year. GDP growth was most influenced by the 29% growth of value added in manufacturing.

2 August (BNS)

In July 91 983 passengers flew on regular flights of Estonian Air and the number of passengers on regular flights departing from Tallinn increased 78.6% compared with the same period last year.

The load factor of the regular flights of Estonian Air in July was 79.3%, 9.2 percentage points higher than last July, the company said.

In the first seven months this year there were 514 612 passengers on regular flights of Estonian Air; compared with the same period last year the number of passengers increased 52.5%.

There were 11 281 flights in seven months, 72.2% more than in the same period last year. In July the number of flights was 1 797, 73% more compared with the same period last year.

In the first seven months of the year the regularity of flights, or whether they were carried out, was 98.9% and the punctuality of the flights was 83.1%. In July the respective figures were 99.1 and 80.9%.

17 July (BNS)

The national air traffic services company Lennuliiklusteeninduse AS (Estonian Air Navigation Services) served 94 709 flights in the airspace of Estonia during the first six months of this year, 9% more than in the same period a year ago.

More than two-thirds of the flights taking place in the Estonian airspace are overflights. The number of flights that passed through the Estonian airspace was 67 514, the number of inbound and outbound flights was 22 848, and flights within Estonia numbered 4 347. In comparison with the first six months of 2011, the number of inbound and outbound flights increased the most, or by 40.5%. The number of flights within the country grew 14.2% and that of overflights one percent.

The biggest number of flights in any separate month during the first half-year took place in June, 18 452, and the smallest number, 13 234, in February. In the first six months of 2011 the company served 86 890 flights and during the whole year it served 182 979 flights. During 2010 it served 160 723 flights.

The density of air traffic in the Estonian airspace has been growing constantly since the country re-established its independence, with the only setback happening in 2009 when 156 518 flights were served, 11.3% fewer than in 2008.

The number of flights served in 1993 was 35 902 and in 2000, 81 252. Flights served last year mark a 410% increase over 1993 and a 125% increase over 2000.

1 June (BNS)

As of 1 June Tero Taskila, the earlier strategy and marketing manager of Air Baltic, will become the new board chairman of Estonian Air, a company controlled by the state, Joakim Helenius, chairman of the supervisory board of the company, told Kauppalaheti.

"In Tero we found a manager of international aviation experience who has business instinct and strategic thinking," Helenius told the paper.

Previously the supervisory board had not publicly confirmed the identity of the new managing director.

Taskila has earlier worked for Finnair, Lufthansa, and Qatar Airways. Taskila told the paper that it was his plan to develop the selection of destinations, adding more direct flights from Estonia.
 

15 August (ERR)

Harbours belonging to the Port of Tallinn handled 1.14 million passengers in July, a record monthly total for the company. The number marks a 2.4% increase compared to last July. All regular routes saw passenger increases, but the biggest growth was recorded on the Tallinn-Helsinki ferry line, which accounted for 82 % of all passenger traffic, reported uudised.err.ee.

The company recorded a record number of passengers for every month of 2012 and a total increase of 4.6% compared to the first seven months of last year.

The port expects 8.7 million passengers this year compared to last year's 8.48 million.

21 June (BNS)

Estonia’s Eesti Energia power utility and GE Energy signed a contract for the building of a nine-generator wind farm on Pakri Penisula. The wind farm will be completed in 2012 and in the future it will cover the electricity needs of about 20 000 Estonian families of average consumption.

The total capacity of the wind farm to be erected in the Tuulepark property at the northern end of the Pakri Peninsula will be 22.5 megawatts and the annual electricity generation nearly 67 gigawatt-hours (GWh).

The Tuulepark property on the Pakri Penisula stands about 21 to 24 meters above sea level on limestone ground. The height of the 2.5 megawatt wind generators from the ground to the upper wing tip is 135 meters.

The duty of GE Energy is to build the foundations and raise the generator masts. The international wind generator builder will launch building work this fall and the generators will go into
operation in summer 2012.

Martin Kruus, board chairman of OÜ Nelja Energia, which is developing the Paldiski wind farm in co-operation with Eesti Energia, told BNS that they were now holding talks with GE Energy for the purchase of the same number of generators.

The substation of the Paldiski Wind Farm will be built by Skanska EMV. The winner of the procurement of building the roads and laying the cables in wind farm will be decided during this summer. The total cost of building the Eesti Energia part of the Paldiski Wind Farm is nearly 33 million euros.
 

14 December (BNS)

The gross domestic product (GDP) of Estonia will grow 1.9% year-on-year in constant prices in 2012, the Bank of Estonia said in its fresh economic forecast published on Wednesday. The central bank's economic growth estimate for this year is 7.9% and for 2013 it is 3.6%. In absolute terms Estonia's GDP would total 16 billion euros in 2011, 16.7 billion euros in 2012 and 17.8 billion euros in 2013.

The central bank forecasts that Estonia’s economic growth will decelerate sharply in 2012. However, with the current account in surplus, expectations being more modest and private sector debt burden having decreased, Estonia's domestic economic imbalances have decreased compared to the situation a couple of years ago and this has boosted resilience to deterioration in the external environment.

Weaker economic activity is alleviated by the ECB Governing Council's decisions in recent months to reduce the key interest rate to 1% and to offer additional liquidity to euro-area banks, the central bank said.

HICP (harmonized index of consumer prices) inflation is estimated to reach 5.1% this year, slowing down to 2.8% next year and going on at a rate of 2.9% in 2013.

Export measured in constant prices is seen to grow 23.5% year on year in 2011. Export growth is estimated to slow down to 1.6% in 2012 and accelerate to 6.4% in the year after that.

The state budget is going to have a surplus equalling 0.7% of GDP in 2011. In 2012 it will have a deficit of 2.0% and in 2013 a deficit of 0.7% of GDP.

The Estonian economy was growing faster than expected during the first three quarters of 2011. Now the growth impetus is waning and uncertainties in the external environment are on the rise, the central bank said. Further developments in Estonia as well as in Europe depend on how problems in several euro-area sovereign bond markets are solved. Therefore, Eesti Pank forecasts that the Estonian economic growth will decelerate sharply in 2012. If the external situation deteriorates even more, a recession cannot be ruled out.

The difficulties of the euro-area are surmountable, even though the economic situation of the region is not simple, according to the Bank of Estonia. Growth impetus of euro-area economies will subside because some economies have to undergo adaptation which has been adjourned earlier, it said.
 

11 August (BNS)

In the first half of the year 3.1 billion euros of revenue was paid into Estonia's state budget, which makes up 54% of the target for the full year, Prime Minister Andrus Ansip said at the governmental news conference on Thursday. Expenditures during the same period totalled three billion euros or 49% of the outlay projected for 12 months.

Ansip said the revenue intake gives the government fairly strong confidence that the target will be met. "We hope more funds than we projected will flow into the budget," he said.

Compared with the same period of the previous year, the revenue inflow increased by 19%. "At the same time a less happy signal is that tax revenue has come in the anticipated amounts. The budget overperformance is mainly due to the sale of Kyoto pollution quotas," the head of the government said.

The general government sector had a surplus of 0.74% of gross domestic product or 115.8 million euros at the end of June.
 

25 January

Estonians have invented a web-based car selection programme that helps the user find a suitable car by offering suggestions on the basis of a few questions the user has answered.

In order to get a suggestion from the Carfits.me programme, the user must answer some multiple-choice questions and describe his needs and habits as well as plans for using the car. Using this information, the system offers a selection of models. The user can select the best choice and a few clicks later can ask for a price quote.

Chief executive of Carfi OÜ Alar Võrk, who created the system’s algorithm, stated that 10 000 work hours were invested into the development of the system and that there is interest in the programme in both Estonia and abroad.

Initially the platform was launched in Estonia and there are plans to move to the Czech and Polish markets within this year. Next year the company plans to expand to Scandinavia and Germany, which is the biggest car market in Europe.

Carfi OÜ is owned by Svenska Handelsbanken AB, automotive industry entrepreneur Raido Toonekurg, and Rain Epler.
 

26 July (ERR)

Moody's Investors Service affirmed Estonia's A1 government bond rating and stable outlook on 25 July. Moody's confirmed Estonia's A1 rating and stable outlook. The rating agency based its decision on conservative budgetary policies, a strong balance sheet, low levels of indebtedness, and sizable fiscal reserves.

"Despite the intensification of the euro area crisis, which will result in a slowdown of growth, Estonia's susceptibility to external shocks is considered to be low. This is supported by negligible macroeconomic imbalances and a relatively healthy banking system," the report from Moody's said.

Moody's praised the government's commitment to satisfying the Maastricht Treaty criteria after the 14.3 % economic contraction in 2009. It also pointed to a budget surplus in 2011 despite a predicted deficit, as well as economic growth of 7.6 % last year (the highest growth in the euro area).

Moody's expects lower growth of 1.7 % in 2012, due to decreasing external demand, increased government expenditures on energy investments and resumed contribution to the second-pillar social security fund. "However, Moody's believes that the government's demonstrated policy responsiveness and its commitment to conservative fiscal policies will compel a reversal of the budget deficit and the resumption of fiscal reserve accumulation," the report said.

The full Moody's report can be read here.

15 August (BNS)

A total of 1.11 million passengers passed through the port of Tallinn in July; of these 632 049 or 62% used the services of Tallink.

Viking Line and Eckerö Line served respectively 222 411 and 130 318 passengers in July. In the same month the market share of Viking Line in the Port of Tallinn was 21% and that of Eckerö Line 11%.

In July the Russian company St Peterline served 13 623 passengers on its regular St. Petersburg-Stockholm-Tallinn-St. Petersburg shipping route.

Last month 112 363 cruise passengers visited the Port of Tallinn. Since the beginning of the year 4.9 million persons have passed through the Port of Tallinn.
 

5 May (BNS)

At the Cabinet session on Thursday, the Estonian government got an overview of the budget inflow in the first three months of the year, according to which 1.5 million euros of revenue, or 26.7% of the target, flowed into the budget; of this 951.2 million euros were tax revenues and 570 million euros non-tax revenues.

The tax revenue that has flown into the budget accounts for 22.4% and non-tax revenue 39.2% of the target for the year, the Finance Ministry said.

In three months the sum total of expenditures was also 1.5 million euros, 24.8% of the budgetary target. According to preliminary data of the state accounts, the government sector budget position of the first two months of the year was 66 million euros or 0.4% of the gross domestic product short. This is 101 million euros less that in the same period last year.

As of the end of March the budget has been filling in as expected. Compared with the same period last year, 18.2% more revenue has been flowing in, mainly due to the bigger sale volume of emissions quotas. The 14.7% growth in expenditures compared with the same period last year was mainly due to transfer of the revenue from the sale of emissions quota between ministries.

Expenditures were made in the three months to the tune of 1.5 billion euros or 24.8% of the target. Without the transfer of the emissions quota revenue and expenditures made at the expense of foreign means, the Q1 expenditure was 3.9% higher than last year. This has mainly been due to bigger payments of social expenses that were made to the tune of a total of 610.5 million euros during the quarter.

In the three months 224.1 million euros, or 22.3%, of the money planned for the year were used for operating expenses of the state. The operating expenses of the three first months of 2011 have contracted by about 0.4% or one million euros compared with last year. Payments for personnel expenses were made to the tune of 129.9 million euros and for household expenses 94.2 million euros.

At the end of March there were 1.1 billion euros of liquid financial reserves or deposits and promissory notes in the state treasury, 49.6 million euros more than at of the end of last year.
 

15 June (BNS)

In the first five months of this year 2.54 billion euros of revenue was paid into Estonia's state budget, which makes up 44.5% of the target for the full year, Finance Ministry data show.

Five-month expenditures totalled 2.49 billion euros or 40.2% of the outlays projected for 12 months, the ministry said. The general government sector ran a deficit of 28.7 million euros or 0.18% of gross domestic product in the January-April period, which is 283 million euros less than a year earlier. The four-month shortfall in 2010, at 311.8 million euros, corresponded to 2.15% of GDP. The substantial narrowing of the gap is due to the sale of emission quotas, among other things, as at the same time last year none of the proceeds from transactions had come in yet, the ministry said.

In the ministry's view, budget performance in the five months meets expectations. Of the five-month budget receipts, 1.63 billion euros was tax revenue and 913.7 million euros non-tax income. May inflow was 575 million euros, 10.1% of the 12-month target.
 

4 January (BNS)

The number of passengers carried by the listed Estonian shipping company Tallink Group grew by 1.3% last year to 9.26 million and the number of vehicles transported increased by 5.3% to 1.12 million units, the company said on Friday.

In the fourth quarter of the past business year Tallink carried 2.13 million passengers, 1% more than the year before. In December passengers numbered 708 170, a decrease of 0.4% compared to the same month of the previous year. The Latvia-Sweden route showed the biggest growth in the fourth quarter, with the number of passengers increasing 4% to 152 944.

On the Estonia-Finland route the company served 365 811 passengers in December, 3.2% more than a year earlier. In the fourth quarter annual growth was likewise 3.2%, with passengers numbering 1.1 million. The number of passengers on the Estonia-Sweden route climbed 2.4% in annual comparison to 79 956 in December and 2.1% to 211 190 in the fourth quarter. On the Sweden-Finland route the number of passengers declined 3% year-on-year to 693 402 in the fourth quarter.

The number of cargo units carried by Tallink totalled 283 973 last year, an increase of 0.2% against the previous year. In the fourth quarter the number of trucks and trailers was 70 457, which is 0.4% less than the year before, while the number of passenger cars grew 7% to 247 922.

In December the carriage of trucks and trailers declined 6.3% in annual comparison to 19 694 units whereas the carriage of passenger cars increased 6.8% to 81 570.

Tallink Group operates six ship routes under the Tallink and Silja Line brands. With a fleet of 18 vessels, it gives work to approximately 6 700 people in Estonia, Finland, Sweden, Latvia, Germany and Russia.

12 July (BNS)

The turnaround season, which will kick off at Tallinn Airport and the Port of Tallinn on Saturday, is expected to see approximately 18 000 tourists switch from planes to cruise ships and vice versa in the Estonian capital from now until September.

The largest Spanish cruise operator, Pullmantur Cruises, which earlier started and ended its Baltic Sea cruises in Helsinki, will be doing so in Tallinn this summer. The first five planes with Pullmantur customers are scheduled to arrive in Tallinn on Saturday to start their Baltic Sea cruise here. "The same will happen every two weeks until September," said Lauri Linnamäe, spokesman for Tallinn Airport, adding that the number of such tourists was expected to reach 18 000, marking an increase of more than 2.5 times over 7 000 turnaround passengers served in Tallinn in 2011.

Linnamäe said that in turnaround service the value-added involved was of an entirely different range than in simply bringing a ship or an aircraft full of tourists to Estonia and meant a big challenge for a large number of tourism and transport companies in terms of logistics, customer service, and international co-operation alike.

"Putting it shortly, it means that tourists arrive in Tallinn from Madrid by plane and start their Baltic Sea cruise here, at the same time when tourists who have completed their cruise board planes and fly back to Spain. That service makes up a long value chain that gives work and livelihood to tens of companies at the same time," the spokesman said.

6 January (BNS)

An estimated 10 000 cruise passengers, most of them from Russia, are set to arrive in the Estonian capital via the port of Tallinn this winter.

Cruise ships with Russian tourists called in Tallinn on 31 December and 1, 2, 4 and 5 January, the state-owned port company Port of Tallinn said. The New Year’s cruises are operated by Tallink and St. Peter Line and the last such stopover will take place at the end of this week.

Sirle Arro, chief of passenger and cruise traffic at Port of Tallinn, said that the port company in collaboration with partners of the cruise organisation Cruise Europe wants to sttract German and British cruise operators into the eastern part of the Baltic Sea as well.

During 2011 a record 443 172 cruise passengers passed through the Port of Tallinn. Overall passenger traffic through ports belonging to the Port of Tallinn totalled 8.48 million last year, also an all-time high. The number was 7% bigger than in 2010.
 

13 January (BNS)

The Estonian Lennuliiklusteeninduse AS (Air Traffic Service Ltd) served 182 979 flights last year, 13.8% more than the year before. Most of the air traffic that passed through Estonian airspace was in transit. Last year Lennuliiklusteeninduse AS served 139 728 flights through Estonia's air space. The number of flights arriving in Estonia from abroad or flights leaving Estonian airspace was 35 419. The company served flights within the Estonian air space 7 832 times last year.

Compared with 2010, air traffic increased in all categories. In 2010 Lennuliiklusteeninduse AS served a total of 160 723 flights of which 124 094 were flights through the Estonian air space, 29 758 arriving or leaving flights, and 6 871 domestic flights.

Air traffic in Estonian airspace has constantly grown since the restoration of independence. The only fall was in 2009 when Lennuliiklusteeninduse AS served 156 518 flights, 11.3% fewer than in 2008.

In 1993 Lennuliiklusteeninduse AS served 35 902 and in 2000 81 252 flights. Last year the company served 410 compared with 1993 and 125% more flights than in 2000.
 

11 January (BNS)

Enterprise Estonia (EAS) will this year distribute 10 million euros within the framework of its export development support scheme to help businesses implement their export plans. EAS administrator Jurg Samel said the export development support scheme combines all previous separate export support instruments and was first applied last year.

The foundation offers enterprises a comprehensive service, i.e. an export plan package, to help them realise their long-term exporting plans, Samel said. "The package consists of consulting, help with drawing up long-term export plans, services and financial support suited for the action plan, and customer support in the form of a customer manager," he explained. "Going by previous years' practice, EAS expects to support the export plans of up to 200 enterprises this year."
 

5 July (BNS)

The international rating agency Fitch has upgraded Estonia's long-term foreign and local currency issuer default ratings (IDR) to A+ from A, with the outlook as Stable. The agency also affirmed the short-term foreign currency IDR for Estonia at F1 and the country ceiling at AAA.

"The upgrade reflects Estonia's solid economic growth performance, exceptionally strong public finances, declining external debt ratios and signs of increasing stabilisation in the banking sector," Fitch said. Public finances are Estonia's key rating strength and euro area membership increases the significance of fiscal policy in the rating profile, it added.

"Fitch rightly names euro area membership and strength of public finances as the key elements of the Estonian country rating -- Estonia has made a lot of effort in the name of these two goals," Bank of Estonia Vice President Marten Ross said.

Fitch pointed out that Estonian wages and prices proved flexible during the crisis and competitiveness has been regained. The short period during which the process of internal devaluation, or falling nominal wages and prices, has occurred indicates the flexibility of the Estonian economy. This flexibility is an important asset for a small country in a currency union, enabling it to adjust after a loss of competitiveness, it said.

The last upgrade of the Estonian rating by Fitch was by two notches to A, with outlook as Stable, in July 2010. The rating agency Moody's last reviewed its rating on Estonia in March 2010,
affirming it at A1 Stable.

Standard & Poor's last took rating action with regard to Estonia in April this year when it maintained its rating at A but changed the outlook from Stable to Positive.
 

4 January (BNS)

The production of Estonian industrial enterprises grew by 7% in November compared to the same month of the previous year, Statistics Estonia reports. The growth was most of all influenced by the manufacturing of electronic products, the statistics agency said.

The significant growth in manufacturing recorded in September was replaced with a small decline in October which reverted to growth again in November. The main reason for the growth was the low reference base of 2011 in the manufacture of electronic products. In September 2011 the growth in the manufacturing of electronic products slowed down sharply, which affected the whole industrial production output. Since September 2012 the production volume in this branch has recovered, accounting for about a fourth of the total manufacturing output.

Among the branches of industry holding larger shares, output grew in November compared to the same month of 2011 only in the manufacture of wood products. In most branches of industry the volume of production fell, including in the manufacture of food and metal products and electrical equipment.

In November 72% of the whole manufacturing output was sold on the external market. Since September 2012 export has increased significantly compared to the same month of 2011 – export sales of manufacturing production grew 13% in September, 14% in October and 18% in November. The increase in exports was mainly caused by the rapid growth in sales of electronic products as well.

Month on month, seasonally adjusted total industrial production increased by 5% and the production in manufacturing increased by 6% in November. Compared to November 2011, the production of electricity decreased by 8% whereas the production of heat increased by 11%.

29 November (ERR)

The Organisation for Economic Co-operation and Development (OECD) has become the latest institution in recent days to raise its predictions for Estonia's economic growth, pegging it at 3.1% for 2012 and 3.7% for 2013.

Projections in the OECD's previous outlook report in May had put the two figures at 2.2% and 3.6%, respectively.

The OECD predicts 3.1% GDP growth in 2012. In its newest report, released on 27 November, the organisation said it expected growth to accelerate next year as improving external conditions give a boost to exports. "While public investment will contract, private investment will pick up, driven by rising capacity utilisation and the planned modernisation of energy and transport infrastructure. Private consumption growth will be underpinned by increasing employment and wages," the report said.

The OECD said that inflation would continue to fall thanks to softening commodity prices. It predicted that the inflation results for 2012, 2013 and 2014 would be 4.3%, 3.3% and 2.8%.

The organisation said, however, that the nation should follow through on planned structural reforms. "The fiscal position is sound, but the policy framework should be strengthened by introducing a multi-year spending ceiling and an independent fiscal council, as planned by the government," it said.

Last week, following higher-than-expected Q3 results reported by Statistics Estonia, SEB also raised its forecasts of the country's GDP growth this year to 3.1%.

12 July (BNS)

In May 237 000 foreign and domestic tourists stayed in Estonian accommodation establishments, which represents a year-on-year increase of 11%. The number of tourists surpassed the best result for the month of May of the past decade, recorded in May 2008, by 5%, Statistics Estonia said.

Foreign tourists numbered 170 000 in May, 12% more than in the same month last year. Transport links with several European countries, added in recent months, have also had a positive impact on the activities of accommodation establishments, the statistics agency said.

Compared to May 2010, more tourists arrived from European Union member states as well as from Russia, the United States, China and other countries. Most of the tourists who stayed in accommodation establishments came from Finland (83 00), but their number decreased by 3% in annual comparison.

Domestic tourists made up 28% of the clients of accommodation establishments and their number showed a year-on-year increase of 6%. Nearly half of domestic tourists were on a holiday trip and 36% on a business trip. More than a fifth of the accommodated domestic tourists, 1 500 more than in May 2010, stayed in the capital Tallinn. The services of accommodation establishments in Tartu, Pärnu, and East-Viru counties were used by 14%, 11%, and 10% of domestic tourists, respectively.

In May 939 accommodation establishments, 129 more than in April, were offering their services to tourists. At the disposal of tourists were 18 600 rooms with 41 900 beds. The room occupancy rate averaged 46% and the bed occupancy rate, 35%, that is, each bed was in use for an average 11 nights during the month. The bed occupancy rate was above average in Tallinn, Tartu and Pärnu. The average cost of a guest night was 30 euros, up by 8% from May 2010 but five euros cheaper than in May 2008.
 

5 July (ERR)

Passenger numbers at Tallinn Airport exceeded the 1 million mark during the January to June period, a first for the institution. A total of 1.06 million travellers passed through the airport during the first half of 2012, a 21.4% increase from the same period of last year.

The most popular destinations for regular flights out of Tallinn were Helsinki, Stockholm and Riga, the airport said in a statement. For charter flights, the resort cities of Antalya, Hurghada and Sharm el Sheikh topped the list.

In the statement, airport representative Lauri Linnamäe said that the facilities were operating near full capacity, creating the risk of problems should glitches occur during peak times. A new terminal scheduled to open in 2014 should relieve the problem, he said. 

So far this year, the national carrier Estonian Air has accounted for 40.1% of flights served by the airport, followed by Ryanair at 16.2%. Last year's equivalent figures were 31% and 19%, respectively.

In 2011, passenger numbers at the airport totalled 1.9 million.

29 April (BNS)

"During the beginning of the summer cruise season one to six cruise boats will dock in Old City Harbour almost every day and in the middle of summer up to 9 000 cruise passengers will be visiting Tallinn on the busiest days," head of the port company's marketing and communications department Sirle Arro told BNS.

Ten cruise ships will call at Tallinn for the first time during the start of the season. The Spanish cruise operator Pullmantur will this year again organise five turnaround cruises with Tallinn as the starting and ending point of Baltic Sea cruises. "In addition to those, there will be a partial turnaround cruise of the German ship Deutschland with some of the passengers beginning and others ending the cruise in Tallinn," Arro said.

The longest ship to put in at Tallinn this year is the 317-meter Celebrity Eclipse with more than 2 800 passengers on board, whereas the 311-meter Adventure of the Seas will bring the most tourists, over 3 000, to the Estonian capital.

The summer cruise season runs until 26 September but cruise tourists are also expected to arrive in Tallinn in October, November and December. All told, approximately 485 000 cruise passengers will visit Tallinn this year on board 328 ships, the highest number ever, Port of Tallinn said. Last year Port of Tallinn served 440 000 cruise tourists on board 294 ships.

21 January (ERR)

The Turkish national carrier is set to open an Istanbul-Tallinn-Vilnius-Istanbul line on 11 June.

According to aviation media company Routes, the airline will fly to Tallinn three times a week using the Airbus A319 aircraft with a capacity of 132. From there, it will continue to Vilnius.   

Turkish Airlines currently flies to around 150 international and 40 domestic destinations. The hub of the company is in Istanbul.

The air route will be the first regular connection between Tallinn and Istanbul.

Tallinn Airport currently has regular air connections to 18 countries.

17 August (BNS)

The listed Estonian building materials and furniture manufacturer Skano Group AS saw its sales in the second quarter of this year increase 13% year on year to 4.9 million euros. The group's EBITDA in the second quarter was 364 000 euros, compared with 459 000 euros in the second quarter of 2011, Skano told the stock exchange. Consolidated net profit amounted to 39 000 euros, down from 273 000 in the second quarter of 2011, and the net margin was 0.8%, compared with 6.3% a year ago.

The increase in sales resulted mainly from the sales of the products of the Püssi natural fibreboard factory and furniture, but the results were still affected by instability in foreign markets, Skano said.

Sales by the Pärnu fibreboard factory and of Isotex internal finishing boards decreased 22% compared to the respective period of last year and the drop was mainly a result of lower sales on the Finnish market, where the issuance of building permits and thus the volume of construction decreased considerably at the beginning of this year.

If in the second quarter of 2011 sales to the Finnish market made up 40% of the total sales of the group, then this year sales to Finland have fallen to 32% of group sales. At the same time, sales to Russia have increased more than 45% and sales to the UK in the amount of circa 300 000 euros have been added.

The turnover of the furniture factory increased 13% and operating profit by 26% over the same period last year, the operating profit being 238 000 euros. The furniture factory's operating margin was 11.5% in the second quarter.

The turnover of the furniture retail chain increased 14% over the same period last year to 569 000 euros and operating profit was 63 000 euros. 

As of the end of June total assets of Skano Group AS stood at 16.1 million euros and liabilities, at 8.5 million euros, accounted for 53.1% thereof. Inventories increased by 0.1 million euros to 3.3 million euros.

The former business name of Skano Grupp AS was Viisnurk.

7 February (BNS)

Martin Lindpere, economist at the Bank of Estonia, said that slowdown of inflation would continue in Estonia in the next few months and the central bank forecast a rise in the unified consumer prices index at 2.8% in 2012.

In January the monthly inflation in was 0.7%, Statistics Estonia said, amounting to 4.5% compared with the same period last year. Euro zone inflation was 2.7% on the basis of a preliminary assessment of Eurostat, the central bank said.

The Estonian price hike is mainly due to a rise in the price of electricity, natural gas, thermal energy and motor fuel, which raised the price level by nearly 0.6 percentage points and accounting for most of the prices hike in January, Lindpere said.

The inflation due to energy was compensated by seasonal discounts that were slightly bigger compared with the previous year.

He added that sale tax was no longer in effect in Tallinn from the beginning of this year. "But it is difficult to notice disappearance of the tax in price statistics. Because of that it is important to bear in mind that taxes established temporarily have the tendency constantly bringing up the price level."

The Finance Ministry said that the January inflation was slightly above the Finance Ministry's forecast from last year due to the higher prices of fuel and household expenditures. Similar to the Bank of Estonia, the Finance Ministry also finds that slowdown in inflation could be expected in the next few months.
 

30 May (BNS)

Total output of Estonian construction enterprises in Estonia and in foreign countries grew by 34% in the first quarter of this year compared to the same period of 2010, including by 29% on the domestic market, Statistics Estonia said on Monday.

The production value of construction enterprises amounted to 264 million euros (EEK 4.1 b), of which the production value of building construction was 176 million euros and the production value of civil engineering 88 million euros.

Compared to the first quarter of 2010, the volume of building construction increased by about 40% and the volume of civil engineering by more than a quarter. The rapid growth in construction volumes was mainly a result of the low reference base from 2010, when the construction market was in the biggest decline, Statistics Estonia said.

The construction volume of Estonian construction enterprises in foreign countries increased by 71% over the first quarter of 2010, with the increase happening mainly in building construction. Construction volume in foreign countries accounted for 15% of the total volume of construction in the first quarter.

Compared to the final quarter of the previous year, seasonally and working-day adjusted construction volume increased by 14%.

The number of non-residential buildings completed during the first three months of this year was 143 and their useful floor area was 72,000 square meters. The useful floor area of transport, agriculture and industrial buildings increased the most. Compared to the same period of 2010, the useful floor area and the cubic capacity of completed non-residential buildings decreased.
 

25 January (ERR)

In 2011, the number of people who spent the night in Estonian hotels increased by 14.6%, according to the EU's statistics agency Eurostat. The only EU countries to see a more dramatic growth in the tourist accommodation sector were Lithuania and Bulgaria with 19.8% and 18.3%, respectively.

Latvia did not lag too far behind Estonia with a 14.1% increase in visitor numbers.

Estonia also stands out because as many as 76% of the people who stayed at Estonian hotels were foreigners. Only Malta and Cyprus boasted higher figures in this department, while in German and Swedish hotels, foreigners made up only 21 and 23% of the customers, respectively.
 

6 September (BNS)

In the first eight months of this year 3.1 billion euros of tax revenue flowed into the Estonian state coffers, 67.3% of the target for the full year, the Tax and Customs Board said. Tax intake was 11.5% bigger than during the same period a year ago, Finance Minister Jürgen Ligi said at the government press conference Thursday. He said that full-year tax intake apparently will exceed the forecast as well.

More money than budgeted was received as tax revenue also in August, with bigger-than-estimated VAT and corporate income tax receipts as principal contributors.

Tax receipts in August totaled 429.2 million euros, the Finance Ministry said. It said the better-than-forecast intake corresponded to the ministry's latest estimate. Solid VAT receipts in August were largely the result of a low level of VAT refunds. The factor behind the good performance on corporate income tax, a relatively unstable source of income, was last year's strong economic growth, according to the ministry.

Of social tax, 163.1 million euros was received in August and January-August receipts stood at 67.4% of the full-year target. Receipts in August were 6.3% bigger than in August a year ago.

Intake of personal income tax in August totalled 30.4 million euros and at the end of the period 54.1% of the amount budgeted for the whole of 2012 had been received. Receipts in August were 12.9% bigger than a year ago. Municipalities, which receive a fixed percentage of the personal income tax paid by their residents, received 55.7 million euros or 6.8% more than in August a year ago.

Of income tax of legal persons 17.7 million euros was received in August and performance measured against the full-year target was 6.7%.

VAT receipts totaled 145 million euros in August and by the end of the period 68.8% of the year's target had been met. Receipts of VAT have been high for three consecutive months and August receipts surpassed the August 2011 figure by as much as 26.4%, seen to be a result of stepped-up domestic
consumption.

Receipts of excise duties totaled 69.6 million euros in August and by the end of the month 65.6% of the amount budgeted for 2012 had been collected. Year-on-year, August receipts were bigger by 11.2% and eight-month receipts by 8.4%.

5 August (BNS)

Estonia has emerged as the fastest-growing aviation market in Europe with a growth rate of 37.1% in passenger numbers in the first six months of this year, Tallinn Airport and Estonian Air said on Friday.

Estonia was followed on the list of 34 countries by Iceland, Albania, Serbia, Finland and Lithuania, which saw growth rates of 23.7%, 23.1%, 20.1%, 18.0% and 17.6%, respectively. Latvia was in 11th place with an annual growth of 13.8%.

Only two countries reported a fall in demand in the first half of 2011– Slovakia by 6.6% and Greece by 7.2%.

The overall number of air passengers in Europe grew by 63 million or almost 11% year on year, according to the latest survey by the online channel for aviation analysis and news anna.aero based on data from European airports.

According to figures by Tallinn Airport, the airport company served 870 045 passengers in the first six months of this year.

"Looking at the developments of recent months, Estonian aviation has come up with good and very good news on several occasions. Opening of new routes, increasing flight frequency, addition of new operators – all have contributed to the significant increase in the number of passengers. Undoubtedly the excellent work of Tallinn Airport and of individual airlines stands behind all this," Tero Taskila, president and CEO of Estonian Air, said. Estonian Air is the biggest operator at Tallinn Airport.
 

16 November (BNS)

The e-Annual Report project of the Estonian Centre of Registers and Information Systems (RIK) received the jury's special mention at the 2012 European Enterprise Promotion Awards (EEPA).

The e-Annual Report enables entrepreneurs in Estonia to file annual reports via an e-reporting mechanism from the Central Commercial Registry. This initiative represents a significant reduction in bureaucratic process and about 99% of the more than 140 000 companies registered in Estonia now use the system. It offers a significant saving for taxpayers and the Estonian Ministry of Finance has valued the time thus saved at 4.6 million euros, RIK said.

The e-Annual Report was one of just three entries shortlisted in the Improving the Business Environment category.

The Grand Jury Prize in the competition went to the British economic development and business support organisation YTKO's Outset project, aimed at promoting and raising desire for enterprise among hard-to-reach groups. Outset is designed to show the unemployed that self-employment and enterprise is a realistic alternative to unemployment. Specifically created to help the most vulnerable groups, including the long-term unemployed, recently redundant, and people with disabilities.

In addition to the Estonian e-Annual reporting project, one of the other three special mentions went to a UN Development program project from Lithuania, Establishing a Unified Approach to Corporate Social Responsibility. The project was created by the UN Development Program in Lithuania to establish a unified approach to Corporate Social Responsibility (CSR), by offering training and support to over 500 small and medium size enterprises. So far over 2 500 people from over 500 SMEs in Lithuania have been involved.

The winners of the 6th European Enterprise Promotion Awards were announced at the Small and Medium Sized Enterprises Assembly in Limassol, Cyprus on 15 November.

29 October (BNS)

The Estonian state-owned energy group Eesti Energia has been assessed as the most valuable company at 1.389 billion euros in accordance with a list drawn up by the investment advisory company Gild Corporate Finance.

The second most valuable company is the subsidiary of the Swedish Swedbank AS, the value of which was assessed at 994 million euros, and the third the Vopak E.O.S logistics company, whose value has been estimated at 626 million euros, it appears from a list published in the Otsustaja (decision-maker) magazine of the daily Postimees.

Last year the most valuable company was Swedbank, with Eesti Energia in the second  and Vopak E.O.S in the third place.

Fourth in the list is Eesti Telekom, a holding company belonging to Telia Sonera, the value of which has been assessed at 549 million euros. During the year Ericsson Eesti, a subsidiary of the Ericsson group, has risen from the eighth place to the fifth has been valued at 487 million euros.

The subsidiary of the Swedish SEB banking group, SEB Pank, and the Tallink shipping group that is listed on the Tallinn stock exchange follow both with 385 million euros, followed  by Tallinna Sadam  (309 million
euros).

Stock exchange companies are presented with the market value in the list.

17 February (BNS)

Estonian Air will open the seasonal Tallinn-Paris route with three weekly flights on 16 March, while during the peak season from 4 June to 31 August the airline will serve the route with six flights a week by adding flights to the existing schedule on Mondays, Wednesdays and Fridays.

Estonian Air has recently named Helsinki, Riga, Jyväskylä, Hanover, Vienna, Venice, Joensuu, Kajaani, and Tbilisi as its new destinations starting from spring 2012. In addition, Estonian Air has significantly increased flight frequencies to Amsterdam, Brussels, Copenhagen, Stockholm, Vilnius, Moscow, and St. Petersburg.
 

15 June (BNS)

Statistics Estonia said that in 2011 the non-profit sector spent nearly 142 million euros on research and development activity, 22% more than 2001. The expenditures of research and development activity financed by the state totalled 109 million euros. That indicator also grew 22%.

Expenditures of the higher education sector on research and development amounted to 107 million euros, up 21%. At the same time expenditures of the sector grew 27% to 31 million euros and expenditures of the non-profit private sector 21% to 3.5 million euros.

25 July (BNS)

In the opinion of the US media businessman Steve Forbes, the course taken by Estonia and the other Baltic countries permitted them to recover from the crisis better than other European countries.

In the August issue of Forbes magazine, Forbes referred to the opinions of New York Times columnist Paul Krugman and Estonian President Toomas Hendrik Ilves. "When it comes to Europe’s problems, Ilves has it right," Forbes wrote. "The three Baltic countries, being almost totally dependent on global trade, suffered during the global economic crisis, but unlike Greece, Italy, Spain and Portugal, they slammed on their fiscal brakes. No Keynesian stimulus programs for them," Forbes said. "All three left their flat-tax regimes in place and stuck to their free-trade policies, although some taxes were raised.”

"The Krugmans of the world were aghast that these countries saw a quick economic turnaround. By European standards all grew smartly in 2011, and they will likely eke out gains this year despite Europe’s recession," Forbes wrote.

"Critics may carp that these are small nations whose lessons are irrelevant, but look at Poland, whose performance has been stellar. It has been carrying out an astonishing privatisation programme¬ covering more than 800 companies, including several with revenues over $1 billion. Warsaw is emerging into something of a regional financial centre," Forbes said.

18 March (BNS)

The International Monetary Fund sees Estonia's economic growth slowing to 3% this year from 3.2% in 2012. The growth will be supported by domestic consumption together with improved labour market situation and tax decreases.

The Estonian financial sector has strengthened over the past year, Alexander Hoffmaister, head of the IMF mission completing its visit to Estonia, said at the press conference on Monday. The loans to deposits ratios have fallen record low and the amount of overdue loans has declined, Hoffmaister observed.

The inflation rate will decelerate to 3% and base inflation to 2% this year, the IMF forecasts.

Hoffmaister also mentioned how Estonia has used its European Union Structural Funds responsibly to develop its infrastructure. Estonia has time ahead of discontinuation of EU support to gradually increase budget outlays on infrastructure, Hoffmaister said.

Finance Minister Jürgen Ligi acknowledged that EU support distorts the economy but observed that the funds flow out of Estonia through current account and thus support the whole EU economy.

10 October (BNS)

In the three summer months of this year more than one million tourists stayed in Estonian accommodation establishments, Statistics Estonia said. The number of foreign tourists increased by 1% and domestic tourists by 3% compared to the summer of 2011.

During the high season, i.e. the months of June, July and August, 710 000 foreign tourists or nearly 5 000 more than the year before used the services of Estonian accommodation establishments. Most of them arrived in this country for a holiday and only 16% were on a business trip.

More tourists than last summer arrived from neighbouring Russia and Latvia, respectively 30% and 13% more, as well as from several European, American and Asian countries.

The share of Russian tourists in the total number of foreign tourists increased by two percentage points in annual comparison. The number of Finnish tourists, however, showed a year-on-year decline in all three months. Fewer tourists than the year before also arrived from Sweden, the UK, Spain, and Italy.

In August 344 000 tourists stayed in Estonian hotels, of whom 35% were domestic tourists. There were 1 094 accommodation establishments with 21 000 rooms and 49 000 beds available to customers in Estonia. The average room occupancy rate was 54%, down one percentage point compared to August 2011. The average cost of a guest night in an accommodation establishment was 30 euros, two euros more than the year before.

3 August (BNS)

Just like in several preceding months, the number of passengers served by the ports of Port of Tallinn hit a new record in July by rising to slightly more than 1.1 million passengers, according to flash data published on Wednesday. At ports managed by Port of Tallinn, passengers travelling on the route between Tallinn and Helsinki numbered 875 000 in July. On the Tallinn–Stockholm route passengers numbered 108 000 and the port also admitted 112 000 cruise passengers.

On the Stockholm–Tallinn–St. Petersburg route launched in spring this year, the number of passengers passing via the port of Tallinn was close to 12 000 in July. Since the launch of the route some 32 000 passengers have used it via Tallinn.

The total number of passengers in the first seven months of the year was 4.95 million, nearly 8% more than in the corresponding period a year ago.

Seven-month freight shipment via ports of the Port of Tallinn totalled 22.09 million tons, an increase of nearly 5% year on year. Freight shipped during July totalled 2.93 million tons.

Shipment of liquid cargoes in the seven months grew 12% to 16.33 million tons. The volume of bulk cargoes meanwhile dropped by one-third to 2.27 million tons. Ro-ro cargoes moved up 9% in comparison with the January-July period of 2010 to 2.16 million tons. Mixed cargoes saw an increase of 46% to 456 000 tons and freight transported in containers grew 12% to 847 000 tons. The number of containers moved up 24% to 109,292 TEUs.

Transit cargoes, totalling 17.87 million tons in the seven months, saw an increase of 5% year on year. Import dropped 8% to 2.06 million tons and export grew 13% to 2.05 million tons.

Ports of the state-owned Estonian port company received 2 977 calls by passenger ships and 1 306 calls by cargo ships in the past seven months.
 

18 July (BNS)

A large shortage of electricity brought a rise in trade in the Estonian price area of the Nord Pool Spot (NPS) electricity exchange with a total of 552 gigawatt-hours(GWh) sold on the market and the amount bought increased by nearly a half.

According to Elering, administrator of the electricity system, the amounts sold were due to the increased need since the end of May in Latvia and the continued need in Lithuania to import electricity to cover their consumption. As a result 5% more electricity was sold in Estonia compared with May. On the electricity market, 96% of the sellers were Estonian producers.

In the Estonian price area of NPS, 425 GWh of electricity was bought in June, 50% more than in May. Estonian marketers sold slightly less than half via the stock exchange, a total of 206 GWh. The average price of the Estonian price areas of NPS was 47.45 MWh, 0.12 euros higher than in May.

In connection with the levelling of the Estonian and Finnish price areas, export to Finland contracted 31%. In June, 135 GWh was imported from the Estonian price area of NPS to Finland, 191 GWh to Latvia and 29 GWh to Lithuania.

While during the high water in April 127 GWh of electricity was imported, in June the export only totalled 1.3 GWh. Import from Lithuania also contracted 44% to 27 GWh. The smaller amount of import is due to growth in the average price of Baltpool, which climbed 2.23 euros per MWh compared with May and remained higher than the Estonian price area of NPS. Growth in the electricity imported from Finland increased by nearly tenfold to 7.5 GWh.

The average system price of the Nord Pool Spot electricity exchange was 48.40 euros per MWh in June. In May the price was 54.49 euros per MWh. The Central European electricity price in June was 49.29 euros per MWh, 19% lower than in the previous period.

The flow of Estlink's capacity was 78% of the time in the direction form Estonia an 9% of the time in the direction from Finland to Estonia.
 

29 November (BNS)

It appears from data of Statistics Estonia that Estonian building companies built 15% more in Q3 2102 than in the same quarter the year before.

In the third quarter building work was carried out totalling 634 million euros, of this buildings for 347 million and structures for 287 million euros. Compared with Q3 2011, the construction of buildings in stable prices grew 12% and that of structures 18%. As before, growth in the building market is pulled by repair and reconstruction work and infrastructure.

The building volume of Estonian building companies operating abroad increased 12% compared to Q3 2011. The growth there only came from the construction of buildings. The share of building volumes put up in foreign countries was 9% of the total building volume in Q3. Building  of new dwellings is still in a low. More than half the dwellings built were in apartment houses. The biggest number of dwellings were completed in Tallinn.

In Q3 this year, 601 permits were issued for the building of dwellings, more than the number of permits for the construction of dwellings. The preferred type of dwelling is a one-family house.

3 April (BNS)

According to a consensual estimate of analysts interviewed by the Institute of Economic Research (EKI), real growth of Estonia's gross domestic product in 2013-2016 will reach 3-4% a year, which is below the long-term average as well as the central bank's growth potential estimate. The most pessimistic scenario puts annual GDP growth at 2% and the most optimistic at 5%, EKI said in its quarterly review of the economy released on Wednesday.

Analysts believe the economy will grow 3.2% this year, 3.6% in 2014, and 3.7% the year after that, and that growth will only reach 4% in 2016.

The growth in private consumption is seen outpacing GDP growth by half a percentage point, ranging from 3.6% to 4.5% during the period. This can be partly explained by the bigger fall in consumption during the economic downturn, but households' increased savings and anticipated loan growth also have to be taken into account, EKI said. 

Consumer prices are expected to rise at an annual rate of 3.4-3.7%, which is higher than desired and above the Maastricht criteria but lower than the last three years' average of 4%. Analysts predict the fastest price rise for the current year. The inflation forecast for 2014 is 3.4%, for 2015 it is 3.6%, and for 2016 3.5%.

Unemployment will according to the forecast decrease at a moderate rate during the period, falling to 8% by 2016. The jobless rate estimates are 9.3% for the current year, 8.7% for 2014 and 8.2% for 2015.

Export of goods is expected to grow by four billion euros and reach 16.6 billion euros by the end of the four-year period. Import of goods is seen increasing by 4.6 billion euros, that is, at a slightly faster pace than export. Because of that the trade gap will widen: if preliminary figures for 2012 put the shortfall at 0.8 billion euros, in 2016 the deficit could amount to 1.3 billion euros.

21 January (BNS)

The current account of Estonia's balance of payments had a surplus of 58.2 million euros in November, according to a flash estimate by the Bank of Estonia. In October the current account was in deficit by 135.2 million euros, revised figures by the central bank show.

In November exports of goods totaled 1.157 billion euros and imports 1.106 billion euros, resulting in a surplus of 51.4 million euros. In the services account exports totaled 325.2 million and imports 261.2 million euros, producing a surplus of 64 million euros.

In the income account the net result was outflow in the amount of 86.4 million euros and in the current transfers account the result was inflow in the amount of 29.2 million euros.

The capital account had a surplus of 58 million euros in November, whereas the financial account inclusive of reserve assets ran a deficit of 48.4 million euros.

In direct investments, 55.2 million euros left Estonia and 48 million euros was invested abroad in November. The balance of portfolio investments was positive by 55.9 million euros, whereas 2.6 million euros left Estonia as other investments during the month.

20 March (BNS)

On Thursday Estonia's national carrier Estonian Air took delivery of the third 33-seater SAAB 340 aircraft that will start serving flights to nearby regions at the end of March. The third SAAB with register number ES-ASO will be in operation under a lease agreement until the end of this year.

Estonian Air needs the third SAAB to serve its increased summer flight schedule, chief commercial officer Rauno Parras said. "At the same time we are working to replace the existing SAAB fleet with new generation turbopropeller fleet," he added.

Estonian Air has significantly improved its flight network and will continue to offer improved air connections from Tallinn, Parras said. "The Estonian market is limited and therefore we need to attract more passengers from neighbouring countries, for instance Finland, to take continuation flights via Tallinn. First we'll widen our operations on the markets where passengers have the same needs – to fly to European capitals and the most important cities," he said.

Estonian Air also received its third 76-seater Embraer this week, which carries the new livery of Estonian Air and is being used by Estonian Air under a lease agreement with Finnair. The fourth aircraft will be delivered to Estonia within nearest weeks.

Estonian Air will in spring start flying to several new destinations including Helsinki, Riga, Jyväskylä, Hannover, Vienna, Venice, Joensuu, Kajaani and Tbilisi.

15 August (BNS)

The Finnish Puume shop furniture manufacturer will move its production  to Estonia and one of Tartu's major furniture makers, Velma Mööbel, will start art subcontracting for it, the daily Tartu Postimees reported.

Velma Mööbel has co-operated with Puume since 2010, and it has operated on the Finnish market since 1999. A new 1 100 square meter production department was built in Vasara Street in Tartu and this will add 12 jobs.

Moving the production to Estonia and making professional products in Estonia will ensure a cost-effective solution, Veljo Kiigemägi, board chairman of Velma Mööbel, told the paper.

The annual output of Velma Mööbel in 2011 was 1.2 million euros, but Kiigemägi believed that this would double with the opening of the new section.

8 June (BNS)

Low-cost airlines are estimated to bring 350 000 additional visitors to the Estonian capital Tallinn during 2011, board chairman of the state-owned company AS Tallinna Lennujaam (Tallinn Airport) Erik Sakkov said.

Speaking at a transport and tourism conference held at the airport's facilities, Sakkov said the number of passengers that low-cost airlines served since the beginning of the year reached 150 000 on Wednesday. The current forecast by the airport company says the number of passengers served by the airport will grow by one million over the next three or four years.

A survey conducted by the airport among Ryanair passengers shows that 43% of the passengers of Ryanair here are incoming tourists, 38% Estonian residents flying out, 15% residents of Russia using the opportunity to travel via Tallinn using Ryanair, while the remaining 4% include residents of Finland and Latvia.

As Sakkov said, the airport of Tallinn has started to approach the balanced model of operation where one-third of the passenger volume is made up of passengers of the national airline, one-third by passengers using low-cost airlines, and the rest of passengers using the services of other airlines taking passengers to bigger airports.

Co-operation with airline companies from Asia and particularly the Far East may help solve the problem of shortage of passengers, Sakkov said. Helsinki and Tallinn are the two European Union airports situated closest to the Far East and Finnair has been using that geographical advantage for some time already, he said.

Flights headed from India and the Gulf region to New York and Washington pass over Estonia and there is the possibility that some of these flights will be landing in Tallinn, offering co-operation opportunities for Estonian Air and the opportunity for people here to board a direct flight to New York.
 

10 April (BNS)

Altogether 160 000 domestic and foreign tourists stayed in the accommodation establishments of Estonia during February, 5% more than in February 2012, Statistics Estonia said on Wednesday. The number of domestic tourists and foreign tourists alike increased.

The number of foreign tourists that used the services of accommodation establishments was 91 000, 6 000 tourists or 7% more than in same month a year ago. Most of the foreign tourists, or 87%, stayed in accommodation establishments of Tallinn, Tartu and Pärnu. Respectively 7%, 10% and 9% more foreign tourists stayed in the accommodation establishments of these cities than a year ago.

As usual, more than half of the foreign tourists were Finns and the number of Finns in accommodation establishments increased 19% compared to February 2012. Russian tourists staying in accommodation establishments numbered 16 000, marking an increase by one-fourth over the same month a year ago. The number of tourists from Latvia decreased. Also the number of tourists from Sweden, Germany and Norway declined.

Of the clients of accommodation Establishments, 43% were domestic tourists. In all 69 000 domestic tourists used the services of accommodation establishments, over 2 000 more than in February 2012.

In February 835 accommodation establishments with 17 000 rooms and 38 000 bed spaces were available for tourists. There were nearly 900 more bed spaces available than in February 2012. The room occupancy rate was 35% and the bed occupancy rate 28%. Compared to February 2012, the room occupancy rate decreased by one percentage point. The bed occupancy rate in large accommodation establishments, or establishments with 100 or more rooms, was 41%, significantly higher than the Estonian< average.

The average cost of a guest night in an accommodation establishment was 30 euros, two euros more than in February 2012.

11 July (BNS)

The share of goods brought into Estonia for processing or storage has been increasing in Estonia's total exports, with subcontracting and re-export making up an estimated one-third of the country's total exports in 2011. According to figures by Statistics Estonia, the sales of goods exported from Estonia to foreign markets grew by more than one-third, or respectively by 35% and 37%, in 2010 and 2011.

In 2011, exports of goods accounted for 75% of Estonia's gross domestic product (GDP), the highest ratio for any separate year so far. "This shows the high dependence of the Estonian economy on exports and also that Estonia's exports and consequently the economy on the whole are influenced by the situation of the economies of the countries that are destinations for the exports," Riina Kerner, analyst with Statistics Estonia, said in the blog of the national statistical office.

In 2011 Estonia's total exports grew 37%, while the rate of growth of re-export was 57% -- from 1.66 billion euros in 2010 to 2.61 billion euros in 2011. "For instance, tractors arrive in Estonia from Britain, they are stored at warehouses here and exported to Russia when a buyer has been found. This kind of trade is reflected in Estonia's export and import volumes alike. If in 2001 the share of such products in Estonia's total exports was only 5%, then in 2011 it was already 22%," Kerner wrote.

Export of subcontracting also has grown faster than total export, or by 48% from 1.07 billion euros in 2010 to 1.58 billion euros in 2011. In 2011 goods brought into Estonia only for subcontracting made up 13% of Estonia's total exports. Ten years ago, in 2001, they made up 37%, meaning that the share of subcontracting goods in Estonia's exports has decreased in the past decade, said Kerner.

In subcontracting, goods are processed under contract, which happens when motor fuel is processed or equipment installed in vans to turn them into ambulance vehicles, for instance. Re-export is the dispatching of imported goods from Estonia without giving them substantial value-added, that is, goods arriving from other countries are just stored. Data on the re-export of goods is estimated data because no national methodology for calculating re-export has been developed. Services and transit are not included in Estonia's total exports.

24 January (BNS)

The gaming software provider Playtech, which conducts a large part of its development operations in the southern Estonian city of Tartu, recorded a 14% growth in gross income in 2011 to nearly 244 million euros. The total revenues of Playtech surged 46% to almost 208 million euros and its share of the profit from the joint venture with William Hill, William Hill Online, was 36 million euros. Gross income in the final quarter of the year totalled 78 million euros, a year-on-year increase of 79%.

"The board is very comfortable with market expectations for the year that ended 31 December 2011 and looks forward to 2012 with confidence," the CEO, Mor Weizer, said.

Playtech said that a more relaxed outlook on gambling laws across the world has meant there are increasing business opportunities that will no doubt be reflected in future expectations.

"The US Department of Justice's pre-Christmas guidance has provided further encouragement for those looking to achieve regulation in the US. Playtech is preparing itself for each and every market," Weizer said.

When talking about significant recent transactions, Weizer named a joint venture with Gauselmann Group, the leading German land-based arcade and casino operator.
 

3 April (BNS)

According to audited figures the revenue of Estonia's state-owned Port of Tallinn was 89.2 million euros and post-tax profit, 36.4 million euros last year. Year on year, the revenues of the port operator increased by 3%.

On Tuesday the supervisory board of the Port of Tallinn confirmed last year's economic results. The company will pay the state a dividend of close to 57 million euros inclusive of income tax. Revenues of the Port of Tallinn have not been as big in any of the preceding years, the company said.

Ports operated by the state company served last year a record 8.48 million passengers, which is 7% more than a year earlier.

The company handled 36.5 million tons of goods, 0.5% less than in 2010. A drop was observed only in bulk cargoes, in other categories freight flows increased.
 

30 April (BNS)

The growth in Estonian retail sales indicates a rise in consumer confidence and the weaker sales results at the beginning of the year might rather have been caused by the cold spring and high heating expenses, analysts believe.

The 7% increase in retail sales last month was the highest since September 2012, Swedbank analyst Tõnu Mertsina observed. Consumer confidence in general and in regard to personal financial situation has improved since last December, with a significant improvement recorded in March, Mertsina pointed out. "With the end of the heating period, the impact of higher electricity prices will decrease, which ought to leave consumers room for other outlays," he said.

Slowdown of inflation together with the acceleration of real wage rise will also have a positive effect on consumption growth, he added.

Retail sales of goods by retail trade enterprises grew 7% at constant prices in March compared to the same month of the previous year, Statistics Estonia said on Tuesday. In January retail sales increased by 4% and in February by 2% year on year. The annual growth accelerated somewhat in March.

20 November (BNS)

The fresh Nordic Outlook of SEB Bank forecasts that Estonia's gross domestic product will grow 3.1% this year and 3.3% in 2013; compared with the Eastern European Outlook released in October, this year's economic growth forecast is 0.6 percentage points higher.

The bank predicts 4% economic growth for Estonia in 2014.  According to the forecast, inflation will reach 4% this year, accelerate to 4.3% in 2013 and slow to 3.3% in 2014.

In its Eastern European Outlook published in October, SEB estimated Estonia's economic growth this year at 2.5%. GDP growth forecasts for 2013 and 2014 were the same as in the fresh Nordic Outlook, respectively 3.3% and 4%.

SEB reviews its economic forecasts six times a year, four times for the Nordic Outlook and twice for the Eastern European Outlook.

31 October (BNS)

Renewable energy accounted for 13% of electricity consumption in Estonia in the third quarter of this year, up by five percentage points compared to the same period last year. The amount of renewable energy produced in the third quarter was 208 gigawatt-hours, representing a year-on-year increase of more than half, the transmission system operator Elering said.

Of the three-month output of renewable energy, 67% was generated from waste and biomass, 31% was wind energy, and 2% was hydroelectric energy.

Looking at the present figures, Estonia is this year already very close to the target of raising the share of electricity produced from renewable sources to 15-20 percent of consumption by 2020, Elering CEO Taavi Veskimägi said.

The share of renewable energy surpassed 10% last year.
 

20 October (BNS)

The ratings agency Standard & Poor’s on Friday affirmed its long- and short-term sovereign credit ratings for Estonia at AA-/A-1+ and revised the outlook to stable from negative. The agency said it expects Estonia to remain resilient to a deeper and more prolonged slowdown in the euro zone, although risks persist. "We believe Estonia's significant fiscal buffers will be sufficient to absorb increasing pressures on government expenditure," it said.

S&P said it is unlikely to raise the ratings on Estonia over the next two years. In the longer term, an upgrade could come from Estonia achieving income levels closer to the euro zone average, recording less volatility in growth and inflation, and demonstrating a longer track record of reduced reliance on external financing, it said. The rating could be lowered if the euro zone crisis leads to a prolonged slowdown in Estonia, and also if the agency sees that wage pressures impair competitiveness and lead to larger external deficits, particularly if Nordic parent bank funding is squeezed at the same time.

"We view a teachers' strike in March and recent health care workers' strikes as increasing pressures on government expenditures, as is its support of the European Stability Mechanism (ESM)," S&P said. "In our view, higher wage demands are manageable in light of the government's considerable fiscal flexibility, as long as they do not materially raise inflation and impair competitiveness." The political environment of Estonia is seen to be stable.

Estonia's Finance Minister Jürgen Ligi described the upward movement of the outlook as a positive signal. "The change of the outlook on the rating is a recognition of Estonia's budgetary policy and control of public sector expenditures. The agency has a high opinion of our ability to cope with the impacts from the debt crisis, in the European context the relative improvement of Estonia's rating is an exception," the minister said, pointing out that wage increases faster than productivity growth were seen as one of the main risks in Estonia's case that could lead to deterioration of the country's position.

Standard & Poor's raised its rating on Estonia to AA-, the highest score given to the Baltic country by any rating agency, on 9 August 2011.

11 March (BNS)

Estonia's gross domestic product (GDP) grew 3.1% in 2010 compared with the year before, according to revised figures published by Statistics Estonia on Friday. Estonia's GDP began to gradually grow in year-on-year comparison in the second quarter of 2010 and in the final quarter of the year GDP increased by 6.7%, Statistics Estonia said. An initial estimate published in February showed GDP growth in the fourth quarter as having been 6.6% and the full-year growth rate as 3.1%.

Estonia's 2010 GDP measured in current prices was 14.5 billion euros or 226.9 billion kroons.

The year 2010 was characterised by a gradual recovery of GDP growth, Statistics Estonia said. The lion's share of the year-on-year growth of 3.1%, 2.6 percentage points, was contributed by the rapid growth of manufacturing. The growth of value-added in manufacturing was supported by rapidly growing exports.

In addition, the growth of value-added of the energy sector and financial intermediation had a considerable effect on GDP growth.

The increase in energy production was mainly caused by growing demand for energy as a result of increased manufacturing activity as well as growth in the export of electricity. The growth of value-added in financial intermediation was above all influenced by banks' bigger income from service fees and net interest income.

GDP growth was hindered by a decrease in value-added in construction and in activities such as public administration and defence, education, health and social work. Value-added decreased the most in construction, mostly as a result of decreased volumes in dwelling construction on the domestic market. Estonia's GDP in the fourth quarter was 3.9 billion euros or 61.3 billion kroons measured in current prices.

Of the fourth-quarter growth rate of 6.7% the biggest share, or 4.1 percentage points, was contributed by manufacturing.

The growth of value-added in the manufacture of electronic and optical products and specifically the manufacture of radio, TV and communication equipment had the biggest effect.