Estonia’s foreign trade was at the same level as a year earlier in the second quarter, and the long decline appears to be ending. Data from the balance of payments show that the turnover of goods exported was down 3% in the second quarter, while the turnover of imports was down 1.6%. The turnover of services exports was up by 3.5% though, while the turnover of imports of services was up 2.8%.

Demand from trading partners is reportedly returning, however, the turnover of exports was quite volatile in the second quarter. Goods exports performing better than previously indicates that the sectors that are most important for the turnover of exports have started to grow, though there was a setback in the early summer (mainly in wood products, machinery, and equipment). July 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 and the economic performance of Estonia’s main trading partners has been equally variable.

There were signs at the start of the year of growth recovery in Germany, but recent developments have not been as positive. Things have perked up in Scandinavia, particularly strongly in Sweden, and also a little in Finland. Exports to Russia have fallen even further.

Exports of services continued to grow moderately and were up 3.5% on the year. Demand was particularly good for information and communications technology, which is one of the largest groups of services, where exports were up by 14%. The turnover of exports of travel services increased by 9%, while exports of transport services grew for the first time in a long time, gaining 8%. Exports of other business services were down by 8%, which affected total turnover as they provide around a third of total exports of services.

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 as it was a year earlier. Imports of goods are affected by manufacturing and the need to import inputs. The growth in the 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 increased a little in the second quarter, though this has been happening quite steadily for four quarters now.

The current account deficit was 170 million euros in the second quarter, or 1.7% of GDP.