Eesti Pank: Estonian Companies Gain Market Share in Europe, Finnish Market Recovery Slow

Eesti Pank reports that global trade was relatively brisk in early 2025 and demand from Estonia's trading partners improved. However, the Iran-US conflict that erupted at the end of February has brought increased uncertainty and supply chain disruptions in commodity markets. This has slowed demand growth and impacted Estonian foreign trade.

In its assessment of Estonia's foreign trade situation, Eesti Pank has noted that the global trade environment was relatively favourable at the beginning of the year and demand from Estonia's main trading partners showed signs of improvement. Estonian companies have managed to increase their market share in Europe in this environment, which is a positive signal for domestic producers and exporters.

However, the situation changed at the end of February when an armed conflict broke out between Iran and the US. This brought a significant increase in uncertainty on international markets and caused serious supply chain problems in commodity markets around the world. The conflict has disrupted the normal rhythm of trade and also affected Estonian foreign trade.

Finnish Market Recovery Lags

Eesti Pank singles out the situation on the Finnish market as a particular challenge. Finland is one of Estonia's important trading partners, but its market is recovering slowly and more gradually than expected. This constrains the ability of Estonian exporters to sell to the nearby market and negatively affects the overall trajectory of foreign trade.

The slowdown in demand growth is a direct result of both geopolitical tensions and the weakness of the Finnish economy. Estonian companies therefore need to seek new markets and customers elsewhere in Europe to compensate for weaker demand in nearby markets. Growing market share in Europe is in this context a significant achievement.