Companies' estimates regarding the sufficiency of export orders have become more pessimistic from month to month due to weak demand in foreign markets and a deterioration in terms of trade, according to a press release.

Demand from Estonia's trading partners has reached a low at the end of the current year. The economies of most of the country's trading partners and of the euro area were still growing in the third quarter, but the outlook has since become more pessimistic. Although foreign trade measured in euros has increased, the strong growth figures are due to persistently high inflation, which has been caused by higher fuel and commodities prices.

Data from the balance of payments shows that goods and services exports had increased 28 percent on year, while imports were up by 30 percent.

Tight price competition in foreign markets, falling demand and the sanctions imposed on Russia have all been unhelpful for exports of Estonian goods. Goods exports increased by 26.5 percent in the third quarter, but this figure was affected by inflation at the same level, and goods exports measured at constant prices were in fact down.

The biggest contributors to the growth in exports last quarter were mineral fuels as well as machinery and equipment. Exports of wood and wood products as well as metal and metal products, meanwhile, were down.

Sanctions imposed on goods from Russia at the end of this year will also affect goods imports as well. Imports of wood and metal, used primarily as raw materials, have ceased by now, and imports of mineral fuels from Russia will end by the end of 2022 as well. As a result, manufacturers seeking raw materials have had to move to other markets.

Total goods imports in the third quarter were up some 29 percent on year, with the growth in imports again driven by imports of mineral products, machinery and equipment as well as vehicles.

Exports of services, meanwhile, remained strong, and travel services recovered as well in the third quarter. Services exports continued to grow last quarter, supporting the current account; services exports were up 32 percent on year at current prices in the balance of payments data. Travel services boosted the growth in services exports for the second consecutive quarter, as they have seen strong recovery following their fall during the COVID-19 pandemic.

Substantial contributions to the growth in services exports once again came from telecommunications and computer services as well as other business services. Exports of transport services, meanwhile, have contracted as expected, as they are affected by the general decline in demand as well as by the drop in the trade in goods with Russia.

In the third quarter of 2022, Estonia's current account was in surplus by 3.5 percent of GDP. The surplus in the services account supported the current account, however the deficit on the goods account was larger than in previous quarters.

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