The spread of COVID-19 and the overall decline of the world economy has also moved the external economy in Estonia into a decline. In the first quarter of 2020, both export and import of goods declined by 3.8 percent and 3.5 percent, respectively.
According to Estonian Bank (Eesti Pank), in March, when the emergency situation was called, a decline in export and import of services in Estonia can be seen. The shrinkage of volume in travel and freight haulage affected the decline of exports of services in Estonia in March, but overall service exports in the first quarter of 2020 were up 2.9 percent from 2019.
The start of 2020 showed significant increase in many important exports of services for Estonia, such as telecommunications, information services, repair, maintenance, and financial services. The current account surplus in regards to GDP of Estonia was 3.9 percent.
COVID-19 has affected commodity markets extensively. Temporary suspensions in business activities due to restrictions have reduced the amount of orders and demand. Those problems are illustrated by the changes in Estonian trade. Export of goods decreased in five major groups: machinery, electrical, and mechanical equipment (-12 percent); mineral products (-15 percent); wood and wood products (-6.6 percent); manufactured goods (-1 percent); and metal products (-0.2 percent). In total, the volume of these groups made up a little under two thirds of total exports and therefore a conclusion can be made that while exports in the first quarter was in a decline, it was not a very deep decline.
"Unfortunately the financial crisis caused by the coronavirus pandemic is just the beginning and its effect on economy will be seen in the second and third quarter," Eesti Pank wrote in a press release.
Editor: Kristjan Kallaste