Estonian Economy and Monetary Policy 12/2002Monetary Developments & Policy Survey. December 2002CONTENTSI. SURVEY OF THE ECONOMIC POLICY ESTONIAFinancial SectorInflationReal EconomyPublic SectorBACKGROUND INFORMATIONECONOMIC FORECAST FOR 2003-2004II. ECONOMIC DEVELOPMENTS EXTERNAL ENVIRONMENTGlobal BackgroundUnited States of AmericaEuro areaJapanNordic CountriesBaltic CountriesCentral EuropeRussiaInternational Financial MarketsESTONIAN ECONOMYDomestic DemandPrivate Consumption and InvestmentsPublic SectorDomestic SavingEconomic GrowthDomestic SupplyEmploymentBACKGROUND INFORMATIONCHANGE IN DOMESTIC REAL SECTOR FINANCIAL BEHAVIOURIII INFLATIONCPI and Other Price IndicesChanges in the Real Rate of the KroonIV MONETARY ENVIRONMENT DEVELOPMENT Liquidity Environment and Interest RatesCapital FlowsMonetary and Loan AggregatesV. FINANCIAL SECTOR DEVELOPMENT BankingBanks' Assets and Their QualityLiabilitiesReturn on EquitySecurities MarketStock MarketBond MarketOther Financial IntermediariesInvestment FundsInsurancePayment SystemFailidSURVEY OF THE ECONOMIC POLICYECONOMIC FORECAST FOR 20032004ECONOMIC DEVELOPMENTSCHANGE IN DOMESTIC REAL SECTOR FINANCIAL BEHAVIOURINFLATIONMONETARY ENVIRONMENT DEVELOPMENTFINANCIAL SECTOR DEVELOPMENT