The direct impact of the UK's withdrawal from the EU will be relatively small on the Estonian economy, Swedbank said according to an analysis of Brexit's impact on Sweden and the Baltics published on Friday.
Should the UK exit the EU without an agreement and trade relations between the states revert to World Trade Organization (WTO) rules, the negative impact of the change in the volume of trade on the Estonian economy would equal 0.19% of the GDP, it appears from Swedbank's analysis.
The impact of increasing trade tariffs on Estonia would be 0.11% of the GDP, while the negative impact of other regulative changes would equal 0.09% of the GDP.
The negative impact of a no-deal Brexit would equal 0.39% of the GDP on the Latvian economy, 0.41% of the GDP on the Lithuanian economy and 0.28% on the Swedish economy.
According to Swedbank, the impact of import tariffs on Estonian imports from the UK would be €17.3 million, with the increase in imported machinery and transport accounting for the largest part thereof — altogether €5.9 million. The respective impact would be €29.9 million on Latvia, €39.8 million on Lithuania, and €341.8 million on Sweden.
The negative impact of export tariffs on trade would be €7.9 million in Estonia, €2 million of which would consist of the decrease in the competitiveness of manufactured goods. The impact on exports would be €20.2 million in Latvia, €49.8 million in Lithuania and €344.6 million in Sweden.
The negative impact of non-tariff barriers, meanwhile, such as burdensome customs procedures, quotas or other discriminatory obstacles, would be approximately €20.3 million on the Estonian economy, €54.1 million on the Latvian economy, €81.4 million in Lithuania, and €661.4 million in Sweden.
The negative impact on the export and import of services, meanwhile, would be relatively bigger in Estonia, amounting to €36.3 million, approximately half of which would come from a decrease in the provision of transport services. The equivalent negative impact would total €41.2 million in Latvia, €34.6 million in Lithuania and €458.6 million in Sweden.
UK accounts for less than 3% of Baltic foreign trade
In general, the UK's share in the Baltics' foreign trade is not high, remaining below 3%. The UK's importance is nonetheless greater across certain sectors, such as in transport equipment as well as tobacco products.
In terms of the export of services, the finance sector may be the most vulnerable, as the UK's share in Baltic exports is highest in this field at approximately 20%. Altogether 23% of Estonia's financial services exports go to the UK.
The UK is scheduled to exit the EU on 29 March, 2019.
Editor: Aili Vahtla