Growth in exports of services brought the current account back into surplus
- The surplus on the current account of the balance of payments was 118 million euros in the second quarter of 2018, or 1.8% of GDP. The surplus arose from the positive balance of exports and imports of services and support from the Structural Funds of the European Union.
- The net outflow of capital shown in the financial account1 was 36 million euros. This mainly reflected investments by insurance companies and pension funds in foreign securities.
- During the quarter the international investment position moved in the direction of net balance by 252 million euros.
- The volume of debt assets of Estonian residents increased by 1.1 billion euros over the quarter, while debt liabilities2 increased by 422 million euros.
The current account of the Estonian balance of payments was in surplus by 118 million euros in the second quarter of 2018. This was due to growth in the surplus on the services account and support from the Structural Funds of the European Union. The surplus on the services account increased by 5% over the year to 559 million euros, with the growth primarily in computer and other business services. The goods deficit increased by 16% over the year to 332 million euros. It grew mainly because of an increase in imports of mineral products, electrical equipment and mechanical machinery. The net outflow of investment income was 231 million euros, which was 7% less than a year earlier. The outflow was mainly reduced by growth in the income of pension funds because of their investment in foreign securities, and a decline in the net outflow of the direct investment income of financial companies. The surplus on the capital account was 38 million euros. Almost half as much again was received in investment support as in the second quarter of 2017.
The net total of the current and capital accounts, or net lending (+) or borrowing (-), saw a surplus of 155 million euros in the second quarter of 2018. This meant that the Estonian economy was again a net lender to other countries, so the country as a whole invested more financial assets abroad than it received from there.
The financial account of the balance of payments shows that investment abroad from Estonia was 36 million euros larger in the second quarter of 2018 than investment in Estonia from abroad. The net capital outflow was primarily a consequence of investments in foreign securities by insurance companies and pension funds. The net outflow of investment through the banking system3 was 805 million euros and occurred through growth in resident deposits, which allowed the banks to reduce their foreign liabilities and increase their foreign assets. The growth in client deposits came from investment in companies and from the current account, as high levels of exports led more money to flow into companies, which they deposited in banks operating in Estonia. The inflow of direct investment was 762 billion euros bigger than the outflow. A large part of the inflow of investment came from the sale of shares in businesses by residents to non-residents.
The net international investment position at the end of the second quarter of 2018 showed that the external liabilities of Estonian residents exceeded their external assets by 7.2 billion euros, or 29% of GDP for four quarters.
Statistics for the gross external debt show that at the end of the quarter, the debt assets of Estonian residents from non-residents were 3.9 billion euros, or 16% of GDP for four quarters, larger than their debt liabilities. Both debt assets and debt liabilities grew during the quarter.
For more detail on the financial account, the international investment position and the external debt see the external sector statistics.
Eesti Pank will release the preliminary statistics for the balance of payments, the international investment position 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.
Eesti Pank accompanies the release of statistics on the balance of payments, the international investment position and the external debt with a separate statistical release and an economic policy explanation.
The statistical release on the balance of payments describes the main changes in the balance of payments, the international investment position and the external debt. The release is independent of economic policy releases and is presented separately from them.
Eesti Pank Statistics Department
Telephone: 668 0725
Email: [email protected]
 Net flow is inflow minus outflow. If the inflow exceeds the outflow, there is a net inflow, if the outflow exceeds the inflow there is a net outflow.
 Debt liabilities are the part of external liabilities which are debts by their nature, meaning that they have to be repaid.
 The banking system covers credit institutions and Eesti Pank.