The current account was back in balance over the half year

Ilmar Lepik
Adviser at Eesti Pank

Economic activity increased in the second quarter of 2018, and as a result the growth in goods exports recovered. The surplus in net exports of services meant that the external balance of the economy improved and the current account was in balance for the first half of the year.

The current account was in surplus by 38 million euros for the first half of the year. The surplus for the first half of 2018 was notably smaller than that in the first half of 2017, as it was 2.1% of GDP last year and 0.3% of GDP this year.

More goods were exported in the second quarter as the economy revived and the fastest growth was of 13% in exports of intermediate goods. Exports grew by less in the other major groups of goods, exports of consumer goods grew by only 1%. The fastest growth in imports was in the same groups as for exports, which supported the outcome that the goods deficit was about the same size as in the first quarter. Increased economic activity did not imply growth in fixed investment, and hence imports of capital goods remained weaker than expected throughout the first half of the year.

The surplus in goods and services fell by around 40% over the year and at the same time competitiveness indicators weakened a little, which is seen in the strengthening of the effective exchange rates. The nominal effective exchange rate has appreciated slowly but steadily, partly because the Russian rouble and the Swedish krona have weakened against the euro since the start of 2017. The rise in the real effective exchange rate means that the different rates of inflation in Estonia and its trading partners need to be considered, as prices and wages are rising relatively faster in Estonia than in trading partners on average.

The sum total of the current and capital accounts was positive by 111 million euros in the first half of the year, meaning Estonia remained a net lender to the rest of the world. The financial account was close to balance since it was positive by 22 million euros, as investments abroad by residents of Estonia in the first half of the year were that much larger than investments by non-residents in Estonia. Overall there were no significant changes in financial flows.

Eesti Pank releases an economic policy comment on the external sector statistics it collects and a statistical release on the balance of payments statistics that discusses changes in the current and capital accounts, the financial account, the international investment position and the external debt.

Eesti Pank will release the statistics for the balance of payments and the external debt for the third quarter of 2018 together with an economic policy and statistical comment on 6 December 2018 at 08.00.


For further information:
Eva Vahur
Public Relations Office
Eesti Pank
Tel: 668 0965, 5330 0619