Central bank: Strong trade growth at end of 2021 to slow this year

Bank of Estonia coat of arms.
Bank of Estonia coat of arms. Source: Siim Lõvi /ERR

Estonia's foreign trade was encouraged last year by the good position of the global economy and by strong demand from Estonia's trading partners for Estonian exports, the Bank of Estonia (Eesti Pank) says.

This allowed Estonia to increase its market share for exports in 2022 with goods and services exports growing by 39 on year to the fourth quarter of 2021 (Q4 2021).

Rapid inflation was partly behind the growth, as it was for imports also, which grew 11 percent, the central bank says.


Imports of goods in the fourth quarter were up even more at 31.7 percent, as Estonian businesses restocked their inventories, having been been reduced because of supply problems caused by the pandemic.

Increased demand also meant that there was a need for additional production inputs. Strong consumption also increased the demand for consumer goods, the bank says


Trade in services also broadly recovered in the fourth quarter of last year. 

Exports of services were up as high as 78.6 percent on year to Q4 2021, affected by the low reference base from the previous year, and by the rising prices, th e Bank of Estonia says.

The most significant contributions to the growth in exports of services came from transport services, telecommunications and computer services, and export revenues from fees for using intellectual property.

The recovery in travel services at the end of the year was still very modest, due to further waves of the coronavirus continuing to constrain travel.

Goods exports alone grew 23.5 percent on year to Q4 2021, with exports of mineral products, wood and wood products, and machinery and equipment the main drivers of this.

Trade balance

The Estonian current account was in surplus by 5.8 percent of GDP in the fourth quarter. The goods account remained in deficit in Q4 2021

As exports of services were larger than imports in the fourth quarter, the services account and the balance of the Estonian current account were again in surplus. 

Future developments for 2022

Developments in foreign trade this year will be affected by Russia's unprovoked invasion of Ukraine starting at the end of February.

Sanctions on Russia resulting from this will have some impact on Estonia's foreign trade both directly and indirectly through the exchange of goods with Estonian trading partners.

Equally, prices pressures are not expected to ease, the central bank says.

State agency Statistics Estonia reported a similar picture into Q1 2022, with trade growing by a third on-year to January 2022, according to the agency.


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Editor: Andrew Whyte

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