The balance of Estonia's foreign trade in services in the second quarter was in surplus by €802 million, up by €39 million on year, according to a press release.

According to Statistics Estonia analyst Jane Leppmets, foreign trade in services continued slow but steady growth in the second quarter, with exports exceeding imports for most types of services.

"The greatest surplus was registered in telecommunications, computer and information services, where exports exceeded imports by €312 million," Leppmets highlighted. "There was also a large surplus in trade in other business services, with exports exceeding imports by €201 million."

Last quarter, the top services exported by Estonia were other business services – including other business support services, advertising and management services – in the amount of €868 million. This was followed by exports of telecommunications, computer and information services – including computer programming and consultancy – for €751 million, and transport services exports – including road freight transport – for €671 million.

Compared with the second quarter of 2023, the biggest increase occurred in exports of telecommunications, computer and information services, which increased by €94 million on year, while the largest decrease was recorded in exports of other business services, which fell by €75 million on year.

Estonia's chief partner countries for services exports in the second quarter were Finland (accounting for 17 percent of total exports), the U.S. (8 percent) and Germany (8 percent), with travel services accounting for the majority of services exported to Finland, telecommunications, computer and information services the majority exported to the U.S. and transport services leading exports to Germany.

The biggest rise was recorded in services exports to the U.S., which were up by €79 million, or 44 percent, on year, and to Germany, which were up by €65 million, or 35 percent. The greatest decrease, meanwhile, occurred in services exports to Latvia, which fell by €48 million, or 24 percent.

Transport services imports up

The top services imported to Estonia in the second quarter were other business services – including other business support services, advertising and management services – for €667 million. This was followed by imports of transport services – including road and sea freight transport – for €664 million and telecommunications, computer and information services – including computer programming and consultancy – for €439 million.

On year, the biggest rise occurred in imports of transport services, which were up by €48 million, while the biggest drop, of €31 million, was recorded in imports of other business services.

The top partner countries for Estonia's services imports were Finland (accounting for 8 percent of total imports), Germany (8 percent), Lithuania (7 percent) and Latvia (7 percent), with transport services accounting for the majority of services imported from each.

The biggest increase was recorded in imports of services from Latvia, which were up by €20 million, or 15 percent, on year, and the U.S., which were up by €20 million, or 29 percent. The biggest decrease, meanwhile, was seen in imports of services from Ireland, which fell by €24 million, or 20 percent, and from Russia, which were down by €16 million, or 59 percent.

Economist: Long decline in foreign trade seems to be ending

Foreign demand from Estonia's trading partners recovered gradually in the first half of 2024, though at a slow pace that varied between countries, said Bank of Estonia economist Mari Rell. As demand recovers, Estonia's goods exports are emerging from a long slump as well.

The total turnover of goods exports in the second quarter was a little lower than during the same period last year, however some increase in turnover was evident within groups of goods.

Estonia's second quarter foreign trade turnover remained steady on year, and it appears that the long decline is ending. Data from the balance of payments shows that the turnover of goods exports was down 3 percent in the second quarter, while goods imports turnover fell 1.6 percent. The turnover of services exports, however, was up 3.5 percent and of services imports up 2.8 percent on year.

Demand from trading partners is returning gradually, and including the monthly statistics for goods exports shows that the turnover of exports was quite volatile in the second quarter, Rell explained.

Goods exports performing better than previously indicates that the sectors most important for the turnover of exports have started to grow, although early summer saw a setback – the turnover of exports of wood products and machinery and equipment, for example, fell in May and June. July statistics, however, once again showed growth in the turnover of exports in all the main groups of goods. This means that manufacturing is still in quite a precarious position, but that enduring difficulties are behind it by now.

The economic performance of Estonia's main trading partners has been equally variable. There were signs at the start of the year of growth recovering in Germany, but more recent messaging from there has not been as positive. Meanwhile, things have perked up in Scandinavia, particularly in Sweden, but also somewhat in Finland. Exports to Russia have fallen even further.

Exports of services, meanwhile, continued to grow moderately and were up 3.5 percent on the year, according to Bank of Estonia figures. Demand was particularly good for information and communications technology (ICT), which is one of the largest groups of services, where exports were up by 14 percent.

The turnover of exports of travel services increased by 9 percent, while exports of transport services grew for the first time in a long time, gaining 8 percent. Exports of other business services were down by 8 percent, meanwhile, which affected total turnover as they provide around a third of total exports of services.

According to the central bank economist, the sluggish performance of the economy in general is also reflected by imports of goods and services, as the turnover of imports was about the same in the second quarter of 2024 as it was a year earlier. Imports of goods are significantly affected by manufacturing and the need to import inputs for it, she noted.

The growth in the imports of machinery and equipment played a significant part in the second quarter, while the continuing decline in imports of fuels has not entirely ceased. The turnover of imports of services, meanwhile, increased somewhat in the second quarter, though this has quite steadily been the case for four quarters by now.

Businesses' outlook largely unchanged

Estonia's current account deficit stood at €170 million in the second quarter, or 1.7 percent GDP. The surplus in services continued to bolster the current account.

Some improvement was seen in the first half of the year in estimates by businesses of their economic position both for export orders and for competitiveness.

A more optimistic stance was more evident at the start of 2024. Estonian businesses' outlook remained essentially unchanged during the summer months, and their assessments saw no notable change for either the better or the worse in the second quarter.

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