Estonian Economy and Monetary Policy 6/2002Monetary Developments & Policy Survey. June 2002CONTENTSI. SURVEY OF THE ECONOMIC POLICY External DevelopmentReal SectorInflationMonetary Policy EnvironmentFinancial IntermediationBACKGROUND INFORMATIONECONOMIC FORECAST FOR 2002-2003Presumptions and Main Indicators of the ForecastII. ECONOMIC DEVELOPMENTS EXTERNAL ENVIRONMENTThe United States of America and JapanEuropean EconomiesSweden and FinlandEmerging CountriesInternational Financial MarketsESTONIAN ECONOMYDomestic DemandPrivate Consumption and InvestmentsPublic SectorDomestic SavingDomestic SupplyExternal SectorBACKGROUND INFORMATIONBUSINESS CYCLES AND THEIR MEASURINGPROFITABILITY OF FOREIGN DIRECT INVESTMENT AND MEASURING OF FDIIII INFLATIONStabilisation of the Price IncreaseDevelopment of the Real Exchange RateIV MONETARY SECTOR DEVELOPMENT Liquidity Environment and Money MarketCapital FlowsMoney SupplyCredit MarketInterest Rates in Real SectorV. FINANCIAL SECTORBankingSize and Quality of Banks' AssetsLiabilities and EquityReturn on EquitySecurities MarketStock MarketBond MarketOther Financial IntermediariesInsuranceInvestment FundsPayment SystemFailidSURVEY OF THE ECONOMIC POLICYECONOMIC FORECAST FOR 2002-2003ECONOMIC DEVELOPMENTSBUSINESS CYCLES AND THEIR MEASURINGINFLATIONMONETARY SECTOR DEVELOPMENTFINANCIAL SECTOR