The indebtedness of companies and households has decreased

Low levels of investment and economic activity led to a decline of around 2% in the total stock of corporate debt liabilities in 2013. The structure of debt liabilities did not change much, and foreign debt liabilities accounted for some 36% of the total.

Corporate equity grew strongly in 2013. Although corporate profit growth slowed and large dividend payouts had something of a braking effect on equity growth, equity still grew by close to 7% in 2013. As debt liabilities shrank at the same time, corporate leverage was reduced further.

The debt liabilities of households started to grow gradually in 2013. The revitalisation of the real estate market led household debt liabilities to increase by 0.3% over the year. Even so, higher incomes meant that the indebtedness of households actually shrank. Household financial assets grew by 10% over the year, with the deposits and cash held by households increasing by around 7%.

As in the past four years, the Estonian economy as a whole was a net lender in the fourth quarter of 2013 and in the year as a whole. This means that more funds were invested abroad or returned there than were taken in from abroad.

Net lending (+) / net borrowing (–) is the difference between transactions conducted with financial assets and liabilities during the period under review. Net lending (+) and net borrowing (-) for the whole economy show whether the country as a whole has taken assets from abroad or invested assets there.

NPISHs – Non-profit institutions serving households

Source: Bank of Estonia
Author: Taavi Raudsaar, Financial Sector Policy Division of Eesti Pank

See graphs here


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