Estonia c.bank gives bleak economic outlook

It said the Nordic banks which now dominate the Estonian banking sector should be able to withstand the slowdown, but that if Estonia s export markets ran out of steam completely then its own downturn would continue for longer. So far the economic correction has been more abrupt than expected primarily due to decreasing domestic demand, the bank said in its new forecasts, updated from April. It stuck to its outlook for inflation to drop to near the Maastricht Treaty level for the adoption of the euro by the end of 2010, but it also saw the budget deficit rising and urged the government to be prepared for further budget steps. It forecast a gross domestic product (GDP) drop this year of 1.8 percent and of 2.1 percent in 2009. Growth would resume the year after at 3 percent, it said.

Investment bankers expect growth of takeovers

Estonia s leading investment bankers say that this is a buyer s market right now and expect the number of takeover to increase. «If you compare it with the situation a year ago when we were contacted by buyers, now most enquiries are coming from owners that offer their business for sale,» Rain Tamm, senior partner of investment bank GILD Bankers, told Eesti Päevaleht. Tamm says that local business owners have become notably more interested in finding a buyer for their companies which means that there may a wave of foreign investments flowing into Estonia in the next few years. He added that the biggest obstacle to such takeovers is that sellers are demanding a much higher price for their companies than buyers are ready to pay. Tamm said that likely takeover targets are operating in very different business sectors and include some large enterprises, but did not specify which.

Estonian quarterly inflation rises

Estonia s consumer price index (CPI) rose 1.6 per cent in the third quarter of 2008, according to statistics released Monday. Prices in the Baltic nation rose by 10.9 per cent compared to the previous third quarter. The latest figures were mainly influenced by price increases of alcoholic beverages and tobacco, but were mollified by decreases in the price of fresh vegetables. Estonia s annual inflation currently stands at 10.5 per cent, but appears to be on a downward trend after peaking earlier this year. Figures released on the same day showed that producer prices remained unchanged from August to September and were up 6.3 per cent compared to September last year. Source http: monstersandcritics.com news business news article 143

Estonia may have 2009 budget gap

Estonia s economy may contract next year and the government may post a budget deficit after the economy entered a recession in the second quarter, Finance Minister Ivari Padar said, Bloomberg reports. Any shortfall would have to be covered by government reserves that equal EEK 28 bln or 11 percent of expected GDP this year, Padar told Parliament in Tallinn today. Governments of Estonia, Latvia and Lithuania are struggling to collect budget revenue and reluctant to cut spending as growth falters and inflation cuts consumers buying power. They risk breaching the EU s budget deficit limit of 3 pct of GDP, officials in the three countries have said, Bloomberg writes. I practically don t see any space in this budget for additional spending cuts, Padar said. You cannot totally curb a country s budget in one year.

Specialist: The situation on Tallinn bourse is a small problem

What s happening on Tallinn bourse is a small problem considering current financial crisis, said Peeter Koppel, strategist of SEB private banking to ERR News. «The situation on Tallinn bourse is clearly nervous, but these turnovers are small and quite speculating small investors are operating there,» noted Koppel. «Our downturn started before that global one. Institutional investors have already left here and those, who are keeping large positions here, have bigger problems in the rest of the world. At current price levels it s not possible to sell large pieces and the second is whether they want to sell at all,» explained Koppel. Although time may seem good for buying stock, Koppel said that it s not knows yet what will be the rules after the crisis. «There is a problem with buying that markets are extremely scared.

Estonia raises bank deposit guarantee to 50,000 euros

Estonia more than doubled its bank deposit guarantee to 50,000 euros (68,000 dollars) on Thursday, in line with a European Union-wide move decided two days earlier. In a statement, the government announced that with immediate effect it was guaranteeing 100 percent of accounts, up to a maximum 50,000 euros or their equivalent in kroons, the national currency. Previously, the Estonian government had guaranteed only 90 percent of deposits, up to a maximum 20,000 euros. The aim of the decision is to treat people within the EU equally and to give additional security to people saving their money in banks in Estonia, the government said. Baltic state Estonia, which joined the EU in 2004, followed the lead of a handful of other members of the 27-nation bloc, even though most of its depositors had been protected by the existing 20,000-euro guarantee.

Real estate prices in Tallinn down 19 in September 2008

Despite slight growth in transactions and monetary volumes, the prices for apartments continued to decrease in Estonia in September 2008 as compared to September of the year 2007 the decrease in apartment prices in Tallinn was 19 in September 2008, BBN reported. Prices of dwellings located in the very centre of the city fell even 25, real estate company Ober-Haus said in the market overview. As compared to April 2007 or a period of real estate boom in Estonia, the decrease in prices in Tallinn was 22 on average, and in the centre of the town 30 on average. Today prices for apartments in older apartment buildings of dormitory suburbs start from 13,000 kroons per m². Most of the transactions with such apartments are made in a price category from 15,000 to 18,000 kroons per m².

Estonian CPI rise eases to 10.5 pct yr yr

Inflation in Estonia eased to 10.5 percent year-on-year in September from 11.0 percent the previous month, though the monthly rate rose to 0.60 percent from 0.1 percent, the statistics office said on Tuesday. Inflation in the small Baltic state surged during an economic boom and as energy prices jumped, but it has started slowly coming down as the economy slumped back again. The index (year-on-year) was mainly influenced by the price increase of food, alcoholic beverages and tobacco, higher prices of motor fuel and transport services and by the increase in the expenditures on housing, the statistics office said. The September data was slightly higher than the forecasts in a Reuters survey of five analysts, which were for a monthly rate of 0.5 percent and an annual rate of change of 10.4

Russian fuel oil exports via Estonia shrink

The September figure represented a 20 improvement from the same month last year. But Tallinn s oil product exports, which are mostly made up of Russian fuel oil, have dropped by 12.1 in the first nine months of 2008. Tallinn handled 15.273 million mt of oil products in the first nine months of 2008 compared to 17.38 million mt for the same period of 2007, according to the port s data. Russia used to export around 25 million mt of fuel oil a year via Tallinn, as well as light products, according to Reuters. Following a diplomatic dispute between Russia and Estonia in April 2007, Russian railways began to divert most of the light products to its own ports. Estonia believes it is only a question of time before Russia also begins to divert more of its heavy fuel oil shipments to its own ports in the Baltic, principally to Ust Luga port.

Lufthansa: Tallinn Airport

German airline Lufthansa named the service of passengers and aircraft of Tallinn Airport subsidiary as the most punctual in the world, the Baltic Business News Channel reported Services rendered by Tallinn Airport was the best among the 960 airports in the world where Lufthansa is flying to. The criteria for evaluation was the punctuality of flights, speed and accuracy of registering the flights, boarding conveniences, compliance with safety requirements and traits of serving the passangers. Rein Loik, the CEO of Tallinn Airport, said that the most positive is that the result was achieved in an environment with limited opportunities at the time when the new terminal was not completely ready for serving the passengers. Steve Woodward, the manager of Lufthansa Nordic and Baltic countries, said that giving the certificate to an Estonian company is extraordinary since it is the first time during his 30-year service.