Bank of Estonia economist Taavi Raudsaar told ERR that: "Private individuals still have a total of €11.16 billion in savings as of the end of July, but it must be taken into account that this money is very unevenly distributed, and many people will not be able to maintain their consumption at the previous level for any length of time, at the expense of savings."

The fall has been in the region of €10 million to €30 million per month, he added.

Rasmus Heinla, head of private customer banking at Coop Bank, said that the volume of private deposits at that bank grew very strongly in the two-year period from the beginning of the coronavirus crisis in the spring of 2020, until the spring of this year.

The main factors behind the growth were reduced consumption resulting from Covid restrictions put in place, and also the disbursement of pension funds, following the liberalization of the Estonian pensions system, but in recent months this had trickled out.

Heinla said: "There are several reasons for this. First, consumption rose with the disappearance of restrictions following the health crisis, and second, the summer period is a time when people traditionally spend more. And third, many people are now using their savings to cope with inflation and the significantly increased prices for goods and services."

Kadri Haldre, Treasury Manager at Estonian bank LHV Pank , said most deposits were in fact growing, with the exception of financial intermediaries, a fairly elite group.

She said: "We hold a concentrated portfolio of deposits from financial intermediaries, and their volume largely depends on the decisions of one or two customers."

"The growth of regular customers' deposits has stood at around 20 percent per year, while retail customers' deposits have grown slightly faster; companies', more slowly. For instance, in August, deposits from LHV's regular customers grew by as much as €102 million."

The general trend in banks across the country for a fall in deposits had first become evident in September last year, though since then, some moths deposits grew and with others they fell, until the current, soaring rates of inflation arrived in spring.

Energy prices had started set record levels, only for these to be broken again shortly afterwards, from late summer last year.

In any case, private consumption rose more quickly than incomes in recent years, Taavi Raudsaar added.

Tanel Rebas, the head of private banking at Luminor, said the bank had yet to see any significant changes in deposits, and the volume of deposits remained stable.

Swedbank's head of private banking, Tarmo Ulla, said that the growth of deposits has slowed down, though at least in July it was still growing, by 9.5 percent year-on-year, in that month.

Ulla agreed the slowdown in deposits growth had started last autumn, albeit off the back of exceptionally high levels prior to that – Swedbank took in almost a billion euros from second pension disbursements alone, he said.

As of July this year, the volume of deposits was still at the 2015-2019 trend, ie. the pre-pandemic level.

Inflation in August in Estonia ran at almost 25 percent, the highest rate in the EU at a time when all member states are seeing high prices.

Earlier in the week, Bank of Estonia director Madis Müller stated that while autumn and winter will be harder economically, a crash is not likely, adding that the current downturn is idiosyncratic in being largely supply-side-driven and to a large extent resulting from the Russian invasion of Ukraine; the state budget will remain in deficit for the foreseeable future, he added.

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