The net international investment position showed that at the end of Q2 2022, the external liabilities of Estonian residents exceeded their external assets by €7.2 billion, or 21 percent of GDP of the previous four quarters, the central bank says.

External assets of Estonian residents increased over the year by €0.8 billion more than the external liabilities did, mainly due to intra-group transactions

The current account and the international investment position remained within the limits of EU criteria for macroeconomic imbalance, the bank says.

The deficit on the current account over the past three years stood at 0.4 of GDP and the investment position of the past four quarters was -21 percent of GDP

Statistics for the gross external debt show that at the end of Q2 2022 the debt assets of Estonian residents on non-residents stood at €10.4 billion, or 30 percent of GDP for four quarters, a figure larger than their debt liabilities.

The debt assets of Estonian residents increased by €0.9 billion over and above their debt liabilities over the year.

Balance of payments and the current and capital accounts quick facts (source: Bank of Estonia)

• Deficit on the current account of the balance of payments fell from 8.8 percent of GDP in Q22021 to 0.3 percent of GDP in Q2 2022.
• Net total of the current and capital accounts, or net lending (+) or borrowing (-), saw a surplus of €85 million in Q2 2022.
• Deficit of 7.1 percent of GDP in Q2 2021 turned into a surplus of 0.9 percent, meaning the Estonian economy became a net lender rather than a net borrower.
• The deficit on the goods account rose by €330 million, mainly from an increase in imports of mineral fuels, machinery and mechanical equipment, and metals.
• Services account posted a surplus of €658 million, due to a decline in imports of computer services, which had an extraordinarily high reference base from last year.
• Net outflow of investment income fell by €223 million. The biggest fall was in the net outflow of direct investment income from non-financial companies. This came mainly from growth in the reinvested profits earned abroad by the Estonian energy sector.
• Investment support from the EU rose by €10 million. The surplus on the capital account fell by €26 million.

Balance of payments, financial account quick facts (source: Bank of Estonia)

• Net inflow into Estonia and outflow abroad of investment shown in the financial account were in balance.
• The biggest decrease in direct investment in Estonia came in the sector of professional, scientific and technical activities. Direct investment abroad increased most in the energy sector because of the increase in the reinvestment of profits earned abroad
• The biggest decrease in direct investment in Estonia was from Germany. The biggest direct investments from Estonia were in Lithuania and Latvia.

More detailed information and charts is available from the Bank of Estonia website here.

The Bank of Estonia will release the statistics for the balance of payments, the international investment position and the external debt for the third quarter of 2022, together with an economic policy and statistical comment on December 8 2022 at 8.00 a.m.

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