Corporate borrowing from abroad continues to grow
Financial Sector Policy Division of Eesti Pank
Corporate debt was 7% larger at the end of the second quarter than it was a year earlier. The total volume of loans taken domestically and abroad by companies and of bonds issued rose in the second quarter by around 200 million euros to a total of 16.9 billion euros. The majority of the growth came from an increase in borrowing from abroad. Corporate borrowing from abroad has increased steadily since 2008 and by the end of the second quarter of this year external debts made up more than 35% of total debt.
Corporate equity and liquid assets grew at the same rate as debt. This meant that corporate leverage and debt coverage with liquid assets remained about the same as in the previous quarter.
As developments in the labour market were favourable for households, the improvement in the financial position of households and the increase in financial buffers continued in the second quarter. Household debts were slightly lower than a year earlier, but increased by 22 million euros from the previous quarter. The financial savings of households, which are their deposits and cash held in hand, grew at an annual rate that reached 7% by the end of the quarter.
The Estonian economy as a whole was a net lender in the second quarter. This means that fewer funds were taken from abroad than were invested or repaid there.
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