Analytics, Estonia, EU – Baltic States, Export, Markets and Companies

Arumäe estimated that June statistics on retail sales growth and industrial production growth demonstrate a continued increase in the divide between domestic and external demand. While retail sales volumes grew 7% in June, industrial production volumes fell 4%.

Although the decline was smaller in manufacturing industry, 0.8%, Arumäe explained that this is still a sign of an increasingly weakening exporting capacity. “In general terms, production volumes have moved sideways since September 2011, without taking a decisive turn either up or down,” she noted.

Arumäe remarked that the fact that the weakness in exports has taken majority of the industrial sector, not just causing fluctuations in a few major industries. According to her, June statistics indicate that the increase in exports as well as industrial production may remain negative at least until September, although that month would not bring any remarkable improvements, either: the economic growth deceleration phase would continue.

“At the same time, exports competitiveness towards countries in the near vicinity of Estonia that do not use the euro, including towards Sweden that is our most notable exports market, ought to keep improving, due to the fact that the price of the euro keeps falling because of the crisis. Estonia is currently very well positioned in terms of the location of potential exports markets. Hence, to sum up, one cannot say that the conditions are particularly difficult at the moment for advancing exports,” said Arumäe.