OREANDA-NEWS. December 11, 2009. Andres Saarniit, Adviser to the Economics Department of Eesti Pank.

This year's third-quarter balance of payments resembles that of the previous quarter. Current account surplus persisted, accounting for 6.6% of the quarter's expected GDP.

Although an increase in the imports of goods for processing decreased the surplus of the goods and services account, it was offset by the declining imputed outflow of investment income.
As regards capital movement, the most discernible trend was that the funds received from the EU budget kept growing year-on-year.

Direct investment mainly lay in intra-banking group transfers. Namely, foreign investors have this year reinforced the capital of their subsidiaries in Estonia and those who have invested abroad from Estonia have done the same. Third-quarter data on direct investment show that capital outflow was larger than inflow.

Looking at portfolio investment, banks' and investment funds' investment in foreign securities predominated.

To conclude, capital inflows and outflows have been of nearly the same size in the period following the bankruptcy of Lehman Brothers. The reserves placed in Estonia by parent banks when the global financial crisis peaked have been withdrawn by now. Thus, data show a decrease in external reserves during the first nine months of 2009.