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NEWS ARCHIVE 2004-2006
ESTONIA’S ECONOMY GROWS
BY 11.6 % IN THE FIRST QUARTER OF 2006
According to preliminary data from Estonia’s statistical office the economy grew by 11.6% in Q1 2006 compared to the same period last year. Please see the link below for more info:
http://www.stat.ee/178890
Analysts are very positive about
Estonia’s economy in 2006
Jan 5th (partly updated on May 31st)
In the beginning of this year Estonia’s leading daily news paper "Postimees" published a summary of different forecasts for Estonia’s most important economic indicators. Forecasts from 7 commercial banks and four research institutions were published. The research institutions were the Central Bank of Estonia (Eesti Pank), Ministry of Finance, Postimees and the Estonian Institute of Economic Research. The average forecast for Estonia’s economic growth in 2006 is 7,5%. The highest growth figure of 9,3% is delivered by Sampo Bank and SEB-Ühispank is most pessimistic with 6,8%. The inflation prognosis for this year ranges between 3,0% and 3,8%. On average inflation is expected to reach 3,4%, which also happens to be the prediction of the Central Bank. The consenus figure for unemployment is 7,3%. The 6-month market interest rate (TALIBOR) is on average expected to be 3,1% by the end of the year. Regarding the Estonian stock market the consensus view is that the main index (OMX Tallinn) will climb from 664 to 777 (+17%). (In the first five months of the year the index has declined to 616. (- 7,3%)). The whole summary can be found on the link below. Since the summary is in the Estonian language a small dictionary has been put below the link:
Summary of Estonian economic forecasts for 2006
Majanduskasv: ecomomic growth (GDP growth)
Tarbijahinna indeks: Consumer Price Index (CPI)
Keskmine kuupalk: Average monthly salary
Tööpuudus: Unemployment
6 kuu TALIBOR: 6 month TALIBOR (TALLINN INTERBANK OFFERED RATE)
Börsiindeks: Stock market index
Tallink will be traded on
the Tallin Stock Exchange
from Dec 9th 2005
Nov 21st 2005
Today it was annouced that Estonian ferry operator Tallink will be listed on the Tallinn Stock Exchange from Dec 9th. It is now possible to sign up for shares until Dec 1st. The preliminary introduction price is between EUR 4.7 and EUR 5.88.
The Tallink prospectus can be found by clicking the link below:
Tallink Prospekt
For more info contact Hansa Bank.
European Commission expects Estonia’s economy
to grow by more than 8% in 2005
For more details click the link below. (Please see page 48-52)
http://europa.eu.int/comm/economy_finance/publications/european_economy/2005/statannex0205_en.pdf
Tallink may be listed on
the Tallinn Stock Exchange
already this year
2005-10-07
Cruise ship operator Tallink has announced plans to list its shares on the Tallinn Stock Exchange according to "Postimees" – Estonia’s largest daily paper. The listing - or "IPO" ("initial public offering") to use financial terminology - could take place already this year. Citigroup together with Ühispank and Suprema will be advisors in the process. For more info click the link below (in Estonian):
http://www.postimees.ee/081005/esileht/179361.php
Estonia reports
double-digit
GDP growth in Q2
2005-09-28
According to preliminary statistics reported by Estonia’s Statistical Office GDP growth was 10% in the second quarter of 2005 compared to the same period last year. For more info click the links below:
http://www.stat.ee/164844
http://www.stat.ee/166149
Ministry of Finance revises Estonia’s GDP growth estimate upwards to 6.5 percent
On August 16th Estonia’s Ministry of Finance announced that it revises the country’s 2005 GDP forecast upwards by 0.6 percentage points to 6.5 %. The estimate for 2006 is also increased – from 6.2 to 6.6 %. According to the Ministry the Estonian economy is expected to grow by annual 6.3 percent in the years 2007-2009. Inflation is expected to be 3.6% this year and 2.6% in 2006 as well as in 2007. Under the Maastricht criteria, the annual rise in the consumer price index (CPI) of a country joining the eurozone must not exceed the average rate of the three eurozone countries with the lowest inflation rate by more than 1.5 percentage points. Andrus Saalik, chief of the department for economic analysis at the Ministry of Finance, believes that Estonia should meet the criteria in 2007. Under current plans, Estonia intends to adopt the euro at the beginning of 2007. The governement is very determined to curb inflation. According to Saalik the government is e.g. thinking about cancelling plans of an increase in the alcohol excise duty, which is planned for in 2006.
Link to Ministry of Finance of the Republic of Estonia ("Rahandusministeerium")
Estonia wins gold medal in World Championships in Athletics 2005
Estonian athlete Andrus Värnik managed to throw his javelin 87.17 meters and this was enough to give him the gold medal in the Helsinki World Championships in Athletics 2005. This is Estonia’s second medal so far. Gerd Kanter took the silver medal in discus. See the news links below:
Gold medal in men’s javelin
Silver medal in men’s discus
Tallink orders a new
fast ferry worth MEUR 110
(2005-08-01)
The Estonian ferry group Tallink and Aker Yards have signed an agreement for the building of a new fast passenger ferry. The purchase price is about MEUR 110 and delivery is set for the spring of 2007. The ferry is intended for regular traffic between Helsinki and Tallinn and the 185-meter-long ship will be capable of crossing the sea between the two capitals in only 1 hour and 50 minutes. The ice class of the ship makes possible year-around operation.
Last autumn Tallink and Aker Yards announced the order of a new passenger ferry worth MEUR 165, which will be the largest cruise ship (on a regular route) in the Baltic Sea. She is currently being built and the planned delivery is in the spring of 2006. Aker Yards have previously built M/S Romantika (2002) and M/S Victoria (2004).
For more info click on the link below:
Aker Finnyards Samsung and Estonia’s Tartu University
sign science co-operation agreement to
develop better and cheaper plasma TV screens
In the end of June 2005 Tartu University Rector Jaak Aaviksoo and Samsung representative Jong-Seo Choi signed a co-operation agreement for the purpose of developing a new type of oxide film to bring down the price of expensive plasma TV screens. The oxide film covers the interior surface of a plasma TV screen. Magnesium oxide is presently used for that purpose, but scientists at the university will now start testing how the film works using other substances. Screen film made of another substance than magnesium oxide would permit to lower the power and voltage requirements of the television and could reduce costs of plasma TVs by half according to Marco Kirm, research director of the Tartu University Institute of Physics. Tartu university and Samsung are also in discussions with regard to a cooperation project for the creation of new luminophores.
(Sources: Eesti Päevaleht, Postimees, www.ut.ee , www.eia.ee )
Estonia has the highest "E-readiness" among emerging economies
The Economist Intelligence Unit (a sister-company of "The Economist" magazine) has since 2000 published an annual e-readiness ranking. A country's "e-readiness" is a measure of its e-business environment, a collection of factors that indicate how amenable a market is to Internet-based opportunities. The survey takes into account factors such as broad band penetration, technological development and mobile penetration. Other metrics are innovation and the penetration of public-access wireless "hotspots". Among all 60 countries in the survey Estonia reached 26th place. The is the highest ranking among emerging countries. The top 3 countries in the survery were Denmark, United States and Sweden (in that order). The report can be downloaded here for FREE:
http://graphics.eiu.com/files/ad_pdfs/2005Ereadiness_Ranking_WP.pdf
and also here:
www.eiu.com/2005eReadinessRankings
(Source: EIU )
IBM cuts 13 000 jobs - mostly in Europe. . .
On Wednesday (May 4th) IBM announced its decision to lay off up to 13,000 employees in an attempt to restructure its European operations.The layoffs -mostly affecting Europe - will include up to 4 percent of IBM:s work force and will give it a second-quarter pretax charge of $1.7 billion. This is about 10% of the expected profit. The company says it aims to reduce the layer of pan-European management and construct its business around global teams instead of single-company operations.
. . . but increases workforce in Estonia by more than 50%
IBM Estonia has annonunced that it will increase its workforce in Estonia by more than 50% to better monitor the servers of IBM customers in Scandinavia. In the summer IBM Estonia will launch a System Operation Team that will administer operation systems of large Scandinavian customers from Estonia.
"The Economist" acknowledges Estonia as initiator of European "flat-tax revolution"
In its April 16th (2005) issue "The Economist" covers the topic of simplifying the tax systems of the western world. The cost of compliance, administration and enforcement of the tax system in e.g. the United States is estimated between 10% and 20%. "The Economist" leader and a special report brings up the idea of "flat taxes" as a way to make tax systems less costly to administer and to ease the burden of complexity on tax payers. A "flat tax" means that the same percentage tax rate is applied regardless of income. As the first country in Europe, Estonia introduced a flat tax of 26%* in 1994. Since then several countries in Eastern Europe have also implemented proportional tax rates. Lithuania and Latvia followed Estonia’s example in 1994 and 1995 respectively. After the turn of the century six more countries have joined the league of flat-tax countries. The first of these countries was Russia, which decided for a flat tax in 2001. Between 2003 and 2005 similar tax systems were put in place in Serbia, Ukraine, Slovakia, Georgia and Romania.
Flat tax is an old idea, but it has often been considered as something which is "fine in theory", but "not practical in the real world". This view may be about to change since now as many as 9 countries in Europe have flat tax regimes. The result of the flat taxes can also be seen as satisfactory. The Estonian economy has been growing impressively since the 1994 tax reform. GDP growth reached double digits in 1997 and has since then (with the exception of a slump in 1999) been stable at around 5 to 6 %. Estonia is furthermore the country in Eastern Europe that has attracted the highest level of foreign investments per capita. Even more appealing than the "flat tax" – in the eyes of investors - is of course the "zero tax" on undistributed corporate profits. Another positive example mentioned by "The Economist" comes from the Russian tax reform. By scrapping the different tax levels and introducing a 13% proportional tax, total revenues to the state increased immensely. The personal income tax e.g. raised almost 26% more revenues in real terms.
To read more please click the links below:
http://www.economist.com/displaystory.cfm?story_id=S%27%29%28L%2APA%3F%2A%21%40%214%0A
http://www.economist.com/displaystory.cfm?story_id=S%27%29%28L%2APQ%27%20%21P%234%0A
http://www.economist.com/displaystory.cfm?story_id=S%27%29%280%2DQA%5B%23%21%40%210%0A
* Estonia’s tax rate in 2005 is 24% and it is expected to be lowered to 23% next year.
(Source: The Economist, April 16th-22nd 2005)
GDP growth in Estonia was 6.2 percent in 2004
Estonia’s GDP (gross domestic product) increased by 6.2 % in 2004 according to preliminary calculations by the Statistical Office of Estonia. Growth levels as high as 10% to 11% were recorded in the fields of manufacturing, financial intermediation and the sector for hotels and restaurants. The construction industry also witnessed a rapid increase growing almost ten percent last year. The field of transport, storage and communcation grew by more than 8%. For more details check out the link below:
http://www.stat.ee/156108
Estonia and Cyprus has seen
the biggest R&D increase
in the EU for the last five years
The EU countries spent an average 1.93% of GDP on R&D (Research & Development) in 2002, which is the latest EUROSTAT figure available. For the increase in R&D there are figures from 2003. Between 1998 and 2003 the average yearly increase in R&D was 11.6% in Estonia and equally high in Cyprus. During the same period R&D incremented by an average of 4% in the EU as a whole.
(Source: EUROSTAT)
The Baltic countries, Slovakia and Ireland have the lowest tax burden in the EU
According Eurostat the overall tax burden as a share of GDP for 2003 varied between 29% and 51% in the European Union. Sweden has the highest tax pressure with 51% of GDP. The lowest tax-to-GDP ratios were recorded in Lithuania (29%), Latvia (29%), Slovakia (31%), Ireland (31%) and in Estonia (33%). The overall tax burden in the EU as a whole was 41.5% in 2003 compared to 41.3% in 2002. Below is a list of some of the countries (2003 are the latest figures available in Feb 2005):
Port of Tallinn handled 6.7 million passengers in 2004
In 2004 port of Tallinn handled 6.7 million passengers, which is a new record. Compared to 2003 it is an increase by 14%. See further statistics on the link below:
http://www.ts.ee/statistics/pass_key_figures.shtml
ESTONIA HAS THE 4th HIGHEST LEVEL OF ECONOMIC FREEDOM IN THE WORLD
In the "2005 Index of Economic freedom" published by "The Wall Street Journal" and "The Heritage Foundation" Estonia ranks as number 4 in the world. This is quite remarkable taking into account that the country until 1991 was a Soviet-style command economy with very little freedom. Today only 3 countries in the world have a higher economic freedom than Estonia. These countries are Hong Kong, Singapore and Luxembourg (in that order). The publishers of the index go as far as naming Estonia as "the land of the free" in the press release (see link) and thereby also express some concern of decreasing economic freedom in the U.S. The latter ranks as number 12 followed by Sweden and Finland.
Click this link to see the complete index
(Source: The Heritage Foundation) (2005-01-04)
Standard & Poor’s raises
the rating of Estonia to
the second-highest level
in Eastern Europe
The rating agency Standard & Poor’s raised its long-term sovereign credit ratings on Estonia from A- to A (on 17th Nov 2004). In Eastern Europe only Slovenia has a higher rating (AA-). The improved rating is based on Estonia’s “robust economic growth perspectives, the sustained strength of its public finances, and its growing prospect of joining the EMU”. On the negative side S&P commented on Estonia’s current account deficit. According to the rating agency Estonia’s small size and rapid investment growth creates a tendency of running high current account deficits. The deficits are however “sufficiently financed by foreign direct investments and other steady financial flows”. These external imbalances will also be mitigated as Estonia approaches the adoption of the euro.
For more info click the links below:
http://www.investinestonia.com/index.php?option=news&Itemid=2&topid=0
www.standardandpoors.com
Finnair’s low-cost airliner "Fly Nordic" will start flying between Stockholm and Tallinn
Estonia’s business daily "Äripäev" reported today that Finnair’s low-cost airliner "Fly Nordic" will start flying between Stockholm and Tallinn. More informatin can be found on the link below (in Estonian) :
http://www.postimees.ee/161104/online_uudised/150218.php
Link to "Fly Nordic"
Tallink buys another new cruise ship – the biggest so far
On Thursday 27th of October it was announced that the Baltic ferry operator Tallink will buy another new cruise ship. The ship is a sister-cruise ship of newly built M/S Victoria and M/S Romantika (which was built in 2002), but it will be 20 meters longer and therefore the longest cruise ship in the Baltic Sea. Delivery is expected in the spring of 2006. The price is reported to be 2.5 billion kroons or 165 million euros. M/S New Building 435, which is the project name of the ship, will operate the ferry line between Tallinn and Helsinki. M/S Romantika – currently on this route - will then start cruising between Tallinn and Stockholm together with M/S Victoria.
More information can be found here:
http://www.akerfinnyards.com/press.cfm?ID=77
Information about M/S New Building 435 (in Swedish):
http://www.tallink.se/sve/info_435_public.php
Link to Tallink (in Swedish):
http://www.tallink.se
Estonia has the lowest corruption level of the countries in the former East Bloc
When Transparency International on October 20th released its Corruption Perceptions Index for 2004 a total of 146 countries were included. From the index it can be concluded that Estonia is the least corrupt country among the countries which formerly were part of the East Bloc. Among the 10 new EU countries only Malta is less corrupt. Estonia is ranked well ahead of “old-EU” Members such as Italy and Greece.
Johann Graf Lambsdorff, responsible for the research, said that Estonia has made significant changes for the better in recent years. "It could be a place where those interested in finding good examples of anti-corruption work could look," he said.
The most un-corrupt country in the world is Finland. Nordic countries in general have performed well. Denmark, Iceland, Sweden and Norway are all in the top 10. A clear tendency in the index is that richer countries are less corrupt than poorer countries. In the EU corruption is higher in the east than in the west. According to the index the most corrupt countries in the EU are Poland, Latvia and Slovakia.
Haiti, Bangladesh and Nigeria are ranked as the most corrupt countries in the world.
The index from Transparency International can be downloaded here:
http://www.transparency.org/cpi/2004/dnld/media_pack_en.pdf
More information about Transparency International and the index can be found here:
http://www.transparency.org/cpi/2004/cpi2004.en.html
Estonia the best competitiveness
among the new EU countries
according to the World Economic Forum
The World Economic Forum published the 2004 edition of “The Global Competitiveness Report” on Wednesday the 13th of October. The report includes the often quoted “Growth Competitiveness Index” which ranks the countries of the world by their competitiveness. Estonia is the highest ranked country among the new EU countries and places itself as No. 8 in the EU as a whole – ahead of e.g. France, Belgium, Luxembourg and Ireland. In this years index the small Baltic republic climbs two places and secures the place as the 20th most competitive country in the world. Among the new EU members Malta is No. 2 after Estonia followed by Slovenia and Lithuania.
The most competitive nation on the globe is Finland, followed by the United States and with Sweden at a stable third place.
The Growth Competitiveness Index rankings from the World Economic Forum can be downloaded by clicking the link below:
http://www.weforum.org/pdf/Gcr/Growth_Competitiveness_Index_2003_Comparisons
The index and other information can be found at the World Economic Forum website on the following link:
http://www.weforum.org/
(Source: World Economic Forum)
Estonian pop band Vanilla Ninja
to represent Switzerland
in the 2005 Eurovision Song Contest
Last week Swiss Broadcaster SF DRS announced that the Estonian Pop Band Vanilla Ninja will represent Switzerland in the 2005 Eurovision Song Contest. The contest will be held in Kiev, Ukraine. Vanilla Ninja has previously -in 2003 - participated in the local Estonian music contest but did not then make it to the Eurovison Song Contest in Riga. Vanilla Ninja consists of Piret, Katrin, Lenna and Triinu. The girl-band has been very successful throughout Europe, especially in Germany, Austria and Switzerland. Their album Traces of Sadness, for example, went straight in to the German charts at number three and has sold gold. Click the link below for further information:
http://www.esctoday.com/news/read/3305
(Source: esctoday.com)
Tallink buys another new cruise ship – the biggest so far
On Thursday 27th of October it was announced that the Baltic ferry operator Tallink will buy another new cruise ship. The ship is a sister-cruise ship of newly built M/S Victoria and M/S Romantika (which was built in 2002), but it will be 20 meters longer and therefore the longest cruise ship in the Baltic Sea. Delivery is expected in the spring of 2006. The reported price is 2.5 billion kroons or 165 million euros. M/S New Building 435, which is the project name of the ship, will operate the ferry line between Tallinn and Helsinki. M/S Romantika – currently on this route - will then start cruising between Tallinn and Stockholm together with M/S Victoria.
More information can be found here:
http://www.akerfinnyards.com/press.cfm?ID=77
Information about M/S New Building 435 (in Swedish):
http://www.tallink.se/sve/info_435_public.php
Link to Tallink (in Swedish):
http://www.tallink.se
Estonia has the lowest corruption level of the countries in the former East Bloc
When Transparency International on October 20th released its Corruption Perceptions Index for 2004 a total of 146 countries were included. From the index it can be concluded that Estonia is the least corrupt country among the countries which formerly were part of the East Bloc. Among the 10 new EU countries only Malta is less corrupt. Estonia is ranked well ahead of “old-EU” Members such as Italy and Greece.
Johann Graf Lambsdorff, responsible for the research, said that Estonia has made significant changes for the better in recent years. "It could be a place where those interested in finding good examples of anti-corruption work could look," he said.
The most un-corrupt country in the world is Finland. Nordic countries in general have performed well. Denmark, Iceland, Sweden and Norway are all in the top 10. A clear tendency in the index is that richer countries are less corrupt than poorer countries. In the EU corruption is higher in the east than in the west. According to the index the most corrupt countries in the EU are Poland, Latvia and Slovakia.
Haiti, Bangladesh and Nigeria are ranked as the most corrupt countries in the world.
The index from Transparency International can be downloaded here:
http://www.transparency.org/cpi/2004/dnld/media_pack_en.pdf
More information about Transparency International and the index can be found here:
http://www.transparency.org/cpi/2004/cpi2004.en.html
Estonian and Georgian Presidents sign joint declaration for the development of democracy and market economy in Georgia
The president of Georgia Mikheil Saakashvili was on official visit in Estonia between the 11th and 13th of October. At a meeting on 12th of October 2004 in Tallinn the President of Estonia Arnold Rüütel and the visiting President of Georgia signed a joint declaration for the development of democracy and market economy in Georgia. The Georgian President commented the declaration by saying: “We are looking at Estonia as an inspiration, as an example for development and we are very grateful for the declaration we signed today”. More specifically Estonia aims to support Georgia in some of the following fields:
* Administrative capacity building.
* Reform process by sharing of Estonia’s experience.
* Training of civil servants on the European integration issues.
* Developing a communication strategy to inform society about the European integration.
* Conducting consultations, conferences and other activities on the issues related to European integration.
* Developing legislation and obtaining the best practices in good governance.
* Promoting public e-services
Mikheil Saakashvili has been president of Georgia since January this year after winning a landslide victory in the national elections. Mr. Saakashvili led the protests that swept Eduard Shevardnadze from power. During the years with Shevardnadze in power Georgia made very little progress in democratic development and market reform. Shevardnadze –who was Foreign Minister of the U.S.S.R. under Gorbachev - was President of Georgia in between 1995 and 2003.
Georgia is situated east of the Black Sea and has 4.7 million inhabitants. The country became independent in April 1991. (Georgia is ranked 133rd in 2004 Transparency International Corruptions Perceptions Index. This means that it is the 11th most corrupt country in the index. So there is a lot of work to do for Estonia!).
The joint declaration can be found here:
http://www.president.ee/print.document.html?gid=54358
(Source: Kanal 2 and internet sources)
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