Estonian Economy and Monetary Policy 1/1998

Monetary Developments & Policy Survey. First Half of 1998

CONTENTS

INTRODUCTION
I. SHORT SURVEY OF THE ESTONIAN ECONOMY AND EXTERNAL ENVIRONMENT
The 1997 Review
Money and Credit Markets
Financial Sector
Real Economy
External Environment Developments
Global Financial Markets in the First Half-year
BACKGROUND INFORMATION
Russia: Financial Crisis and Its Potential Impact on Estonia’s Economy
II. REAL ECONOMY
Domestic Demand
Private and Public Sector Consumption
Investment and Saving
Foreign Demand
Domestic Supply
BACKGROUND INFORMATION
Changes in the Balance of Payments and Their Impact on the Interpretation of the Macroeconomic Development
Overheating of the Economy
III. INFLATION
IV. MONEY AND CREDIT MARKETS
Monetary Aggregates
Loans
Money and Foreign Exchange Markets
Interest Rates
BACKGROUND INFORMATION
Impacts of the European Economic and Monetary Union
Trade-related Impacts
Impacts Related to the Exchange Rate
Impacts of the Euro on the Financial Sector
V. FINANCIAL SECTOR
Banking
Liabilities
Banks’ Assets and Sector’s Adaptation to the Changing Environment
Banks’ Loan Portfolio and Asset Quality
Profitability
Bank Mergers
Non-banking Financial Intermediation
Bond Market
Stock Market
Other Non-banking Financial Intermediaries: Insurance, Leasing and Investment Funds
BACKGROUND INFORMATION
Eesti Maapank (Land Bank of Estonia)
VI. MAJOR EVENTS IN ECONOMIC POLICY IN 1998
Financial Markets in the First Months of 1998 and Additional Memorandum of Economic Policies
Economic Policy in Late Spring
APPENDIX