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International Internet Magazine. Baltic States news & analytics Wednesday, 01.03.2017, 19:46

The Estonian current account remains in surplus

Andres Saarniit Economist at Eesti Pank, 09.12.2016.Print version
The current account surplus diminished in the first half of the year, but in the third quarter it was again bigger than at the same time last year. One cause of the increase in the surplus was the broad-based acceleration in growth in exports of goods and services. At the same time, preliminary estimates show investment to have been less in the third quarter than at the same time a year ago, which held back growth in imports.

At the end of last year the current account surplus started to shrink in yearly comparison. Despite faster growth in exports of goods and services, the current account surplus declined further in the first half of this year. This indicates increased investment activity in the private sector, which required larger imports of goods and services. The third quarter proved an exception, as the current account surplus was around 5.5% of the GDP of the quarter, or again larger than a year earlier. The current account surplus has only previously been so large during the exit from the recession and the crisis in 2009 and 2010.


One main cause of the increase in the surplus was the broad-based acceleration in growth in exports of goods and services. At the same time, preliminary estimates show investment to have been less in the third quarter than at the same time a year ago, which held back growth in imports. Overall the surplus on the goods and services account increased almost by half over the same quarter of last year. To a smaller extent the growth in the current account was helped by a fall in the outflow of investment income.


In the first nine months of this year taken together, the surplus on the current account was still smaller than that of last year, both in euros and as a ratio to GDP. If domestic savings remain close to their current levels , the current account position will be affected mostly by investment activity in the near future.






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