Observer Eesti Oü

WEEK 16th 2004

Monday, 12th of April, 2004

Poorest countries of the EU with fastest growth
The recent spring prognosis of the European Commission predicts fastest economic growth during 2004-2005 for the poorest member states Estonia, Latvia and Lithuania. In Baltic countries, economy will grow 5-6 percent during 2004 and 2005. The main engine of economic growth in new member states is private consumption. Purchasing power has increased also due to low inflation that was 2.1 percent in new EU member states in 2004. In addition, growth of wages has been highest in Estonia - 8 percent.

Wednesday, 14th of April, 2004

The value of foreign trade increased in Estonia in February
According to preliminary data, the value of Estonia’s foreign trade by special trade system in February 2004 was EEK 12.3 billion. Export was EEK 5.2 billion (42 percent) and import was EEK 7.1 billion (58 percent). The trade deficit reached EEK 1.9 billion.

Accession energy to enliven Estonian economy
Accession to the European Union has enlivened Estonian economy already before the actual accession: consumption increases, export grows and foreign investments accrue.
For example, compared to last spring, sale of furniture and home electronics has increased. This year’s March is an all-time record also in car-sale – turnover grew 13 percent compared to respective period last year. Growth of consumption reflects also in the success of Ego instalment-cards. By the beginning of April, Hansapank had issued 80,671 Ego cards, which is 1900 cards more than last month. Besides local consumers, EU accession raises the interest of foreign, especially Finnish shopping-tourists. This increases the incomes of both shipping companies and local businesses. Also the port of Tallinn expects a growth in the number of passengers, investing EEK 400 million to increase its reception capacity.

Editorial: healthy political spirit in an economically healthy body
Äripäev prognosticates that the growth tempo of Estonian economy will not slow down after May 1, when critical political transitional events will end for the time being. Estonian economy will probably increase 6-7 percent, predicts Äripäev.
Last year ended with an economic growth of 4.7 percent in Estonia. This result is good compared to a rich Europe but slow compared to Latvia and Lithuania. But this year has brought progress. In addition to January’s 10 percent, export grew 18 percent in February and that in the conditions of strong EURO and kroon, which makes the result even more valuable. After EU accession, export market will expand to both east and west.

Estonia’s accession to the EU to increase competition in financial sector
Financial inspection sees newcomers to the markets of banking and insurance after EU accession on May 1.
Andres Trink, head of financial inspection admitted that there will definitely be a new bank or insurance company at the local market already before the end of the year. Newcomers are expected from outside the EU, from the side of Russia. In addition, interest towards expansion to the EU has increased at the local financial sector.

Sales of Liviko grew by fifth
Estonia’s largest distillery Liviko increased sales in March by 18 percent and exports increased 19 percent year-on-year. In three months, Liviko has sold 1.82 million litres of alcohol, which is 8 percent more than a year ago.

Elqotec’s 1Q surpassed expectations
First quarter results of Elcoteq Network surpassed expectations – sales turnover of the company grew from EUR 517.3 million to EUR 620 million compared to last year. Elcoteq’s operating profit reached approximately EUR 10 million compared to EUR 5.7 million a year ago.

Friday, 16 April 2004

Eesti Telekom's Q1 net profit at EEK 319 million
Net profit of Eesti Telekom in the first quarter amounted to EEK 319 million and was 39 million more than a year ago. The company's first-quarter operating income totalled EEK 1.21 billion.

BLRT Group grew profit
Compared to 1Q in 2003, Estonian ship building concern BLRT Group grew profit by 38 percent. Quarterly turnover of the group reached EEK 330 million, which is 37.8 percent more than in 2003. Growth resulted mainly from a number of orders from Klaipeda plant.

Outrageous sales in IT-companies
Estonian IT companies have seen a rapid rise in annual sales as most vendors increased sales in March by 50 percent. In general, computer manufacturing increased 46 percent in March. Estonia’s largest IT merchandiser GNT Estonia says its sales went up 66 percent in a year in March. Entrepreneurs believe that the growth is mainly due to high purchase interest of private consumers, EU accession and increase of prices after that.

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