Bank of Estonia: Fall will be rough for export
Bank of Estonia economist Rasmus Kattai says although export rates have climbed back to similar levels as of last year, conclusions can not be drawn based off one month and fall will most likely be a difficult time for exports in Estonia.
ERR News wrote on Monday that exports of goods recovered from the spring coronavirus pandemic and remained at approximately the same level in June 2020 that they had been in June 2019, according to state agency Statistics Estonia, though imports fell by 8 percent.
Kattai told ETV's daily affairs show "Aktuaalne kaamera" on Monday: "Export numbers for June were positive and optimistic. The recovery that took place gives us reason to believe that the worst has passed for the export sector. At the same time, figures for one month should not be used to draw the conclusion that the rest of the year will be fine."
A large part of exported goods comes from companies' warehouses who have been able to ship out their delayed goods, but that does not mean production has increased. Companies that suffer most in terms of sales are ones that sell equipment for production, retail is doing well however.
Kristjan Pungas, analyst for the Ministry of Finance, said: "Retail has done surprisingly well - volume has been even higher than a year ago. It is possible that consumption for the last two months has been left behind and people have increased their consumption temporarily. /.../ Currently, trade and retail has recovered but there is still caution about the future."
The future will largely depend on whether or not a second wave of the novel coronavirus will hit Estonia and what restrictions will be set. Some predictions can still however be made.
Kattai added: "Fall and the second half of the year will most likely be tough for exports. European economy, which dropped by approximately 15 percent in the first six months, is recovering slowly and that means export markets will tighten for Estonia and make it difficult to sell products outside of Estonia.
"If the situation remains relatively calm, then we can predict that 2021 will provide much more solid ground for exporters to base their actions on."
He concluded saying export of goods will recover faster but services, especially travel, will suffer longer due to restrictions.
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Editor: Kristjan Kallaste
