....In the middle of July oil prices reached their new record influenced mainly by rising geopolitical tensions in the Middle East and Nigeria. However, for the European economy the impact of sky-high oil prices is somewhat smaller as euro strengthens against USD. The growth of Estonian export market remained strong in the 2nd quarter.
The growth of consumer prices decreased from 4.7% in May to 4.3% in June caused by the changes in fuel and food prices. Estonian inflation exceeded the euro area inflation by 1.5 pp.realisation accelerated to 11% and 15% respectively in May caused by increased demand on domestic and external market. The yearly growth rate of retail sales in constant prices accelerated to 22% driven by increased growth rate of manufactured goods. The volume of transit declined in May compared to the same period a year ago as the transportation of crude oil and oil products decreased.
The economic growth accelerated to 11.7% in the 1st quarter of 2006 compared to the same period a year ago, exceeding the average growth of the EU countries by 9.5 pp. The acceleration was caused mainly by the increase of domestic demand growth rate, to 13.4%. The impact of export sector for the GDP growth was again negative in the 1st quarter.
The yearly growth rate of industrial production and realisation accelerated to 11% and 15% respectively in May caused by increased demand on domestic and external market. The yearly growth rate of retail sales in constant prices accelerated to 22% driven by increased growth rate of manufactured goods. The volume of transit declined in May compared to the same period a year ago as the transportation of crude oil and oil products decreased.
The increase of loan volumes, both by enterprises and individuals, remained significant (53.7%) in May. Prevailing part of loans are invested into real estate sector. Though interest rates are slightly increasing it is not enough to cut down thriving domestic demand. In recent months deposits have also increased significantly but their growth rate has been smaller than that of loans. As a consequence banks are borrowing additional funds from their foreign mother banks.
According to preliminary reports revenues of the state budget amounted to 6.3 billion kroons in June, i.e. 10.3% of the budgeted amount. At the same time budgeted expenditures amounted to 5.8 billion kroons, i.e. 9.4% of the budgeted amount. By the end of June the state budget surplus was 2.0 billion kroons.
Debt of the central government amounted to 2.5 billion kroons by the end of June. Compared to the same period last year the debt has decreased by 0.4 billion kroons, i.e. 14.8%.
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