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Estonia's foreign trade in the first three quarters of 2022

Updated: Jan 9, 2023

Estonia's foreign trade in goods by value showed strong growth in the first half of 2022, due to a sharp increase in export and import price indices. This strong increase appears to mask a stagnation or even a decline in Estonian foreign trade by volume. Nevertheless, the structure of Estonian trade remains unchanged: Estonia trades mainly with its neighbours and within the EU, leading it to develop a small trade deficit of EUR 2.5 bn (compared to EUR 1.25 bn for the first three quarters of 2021).


Estonian foreign trade: a strong growth due to prices

In the first three quarters of 2022, Estonia exported EUR 16 bn of goods and imported EUR 18.5 bn. In both cases, this is a marked increase compared to the first three quarters of 2021, when exports amounted to EUR 13.17 bn (+21%) and imports to EUR 14.42 bn (+28%). The trade deficit doubled from EUR 1.25 billion to EUR 2.5 billion (+100%).


These increases are mainly explained by a rise in prices (export price index: +23.1% between September 2021 and September 2022, year-on-year; import price index: +24.8%). This means that the increase in trade by value is not reflected in trade by volume. Thus, exports in volume recorded in the first three quarters of 2022 are lower than those recorded in the first three quarters of 2021 (-2% year-on-year). On the other hand, the volume of imports increased (+3.2%).


Of the EUR 16 bn of goods exported by Estonia, EUR 10.11 bn were goods of Estonian origin - 63% of the total exported. The proportion is lower than in the first three quarters of 2021, when Estonia exported EUR 9.61 bn of goods of Estonian origin.


The country exported EUR 3.26 bn worth of machinery and electronic equipment in 2022, EUR 242 mn more than in 2021. This type of product constitutes the largest share of its exports (20.4%), followed by mineral and oil products (EUR 3.17 billion, or 19.9% of exports). Exports of mineral products have increased by 43% compared to 2021 (EUR 2.225 billion in 2021), an increase of EUR 952 million. Exports of wood products have also increased from EUR 1.43 billion in 2021 to EUR 1.79 billion in 2022.


The main imported products are also machinery and electronic equipment, amounting to EUR 3.68 billion, or 19.9% of imports for the year. Mineral and petroleum products also show the largest increase over the year, rising from EUR 2.31 billion in the first three quarters of 2021 to EUR 3.68 billion in 2022. This 59% increase is mainly explained by the rise in energy and hydrocarbon prices. Mineral and oil products accounted for 16% of Estonia's imports in the first three quarters of 2021, compared with 19.9% in 2022. In 3rd and 4th position in 2022, we find metal products (EUR 1.86 billion, +34%) and transport equipment (EUR 1.72 billion, +16%).


Trade is primarily regional and European

Estonian foreign trade is highly integrated at the regional level. Indeed, the main trading partners for goods were neighboring countries in the first three quarters of 2022 (six in the top ten partners of the country). First, we find Finland, by far the largest trading partner, accounting for 15% of the country's trade, amounting to EUR 5.2 billion. In second place, we find Latvia, with a trade amounting to EUR 3.95 billion, or 11% of total Estonian trade in 2022.


The other neighbouring countries in the top ten are Lithuania (3rd with EUR 2.88 bn; 8%), Sweden (4th with EUR 2.78 bn; 9.2%), Russia (6th with EUR 2.11 bn; 6%; the European sanctions not having come into force at that time) and Poland (7th with EUR 1.69 bn; 5%). In total, more than half of Estonia's trade is with neighbouring countries (54% of trade), an increase of 3 percentage points compared to the first half of 2021.The other trading partners are Germany (5th; EUR 2.74bn; 8%), the Netherlands (8th; EUR 1.34bn; 4%), the United States (9th; EUR 1.18bn; 3%), and finally Denmark (10th; EUR 767m; 2%).


As the top ten illustrates, Estonia is very much part of the European bloc (8 partners in the top ten are members of the EU). In the first three quarters of 2022, total trade between Estonia and the rest of the EU amounted to EUR 26.4bn, or 77% of Estonia's trade. Exports to the EU reached EUR 11.6 bn in the first half of the year, up 22% compared to the first three quarters of 2021. Imports from member states amounted to EUR 14.8 bn, up 30%. Estonia recorded a trade deficit with the EU of EUR 3.2 billion in the first three quarters of 2022, compared to EUR 1.9 billion in 2021.

Bilateral trade relations with France: a balanced and limited trade

Bilateral trade with France showed a marked growth between 2021 and 2022. Indeed, trade between Estonia and France reached EUR 569m in the first three quarters of 2022, compared to EUR 513m in the same period of 2021. This represents an increase of 16% in one year, less than other countries, which makes France Estonia's 14th largest trading partner.


Estonian exports to France amounted to EUR 301 million, an increase of 22% compared to the first three quarters of 2021. Imports from France increased by 11% year-on-year to EUR 295 million in the first three quarters of 2022. Therefore, Estonia's trade balance is almost balanced, with a trade deficit of only EUR 6m with France.


Estonia's main export to France is wood and wood products, which amounted to EUR 76.8 million in the first three quarters of 2022. These products represented 28% of Estonia's exports to France. The other main export areas to France are machinery and electronic equipment, amounting to EUR 57.6 million (21% of exports to France), and chemical and industrial products (EUR 45.6 million; 17%). Overall, the main sectors of the Estonian economy exported less to France in 2022 than in 2021, with the exception of the wood sector (+26%) and the seeds sector, which saw a staggering increase of 1827% (from EUR 0.7m, 0% in 2021 to EUR 11.49m, 4% in 2022.


Conversely, Estonia's imports from France mainly transport equipment (EUR 98.6 million; 29% of imports), metal products (EUR 65.9 million; 19%) and chemical products (EUR 55.2 million; 16%). Estonian imports from France increased by 22% compared to the first three quarters of 2021. This increase was mainly driven by metal products (+99%).



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