Current account swings to surplus

TALLINN - According to Estonia’s balance of payments report, published on March 11, the current account surplus was 4.6 percent of GDP at the end of last year, writes Postimees Online. In 2008, the current account deficit was still higher than nine percent of GDP. Due to the low point in domestic demand, as well as foreign demand, both exports as well as imports of goods decreased last year.

In the context of the entire year, the account deficit in 2009 was nearly four times smaller than in 2008. In terms of services, foreign demand was higher, and there were also business services, the sales volume of which to foreign countries grew in comparison to the year 2008.

As for domestic demand, surplus in foreign trade of goods and services referred to an increase in savings. As savings last year exceeded the amount used for investments, there was no need for external financing and it was possible to decrease foreign debt.
In comparison to the end of 2008, the external debt volume had by the end of 2009 decreased by 25 billion kroons (1.6 billion euros). Due to the economic crisis, the debt to GDP ratio, the indicator that is often used to measure the debt level, did not decrease and reached 127 per cent by year-end.