The current account of the Estonian balance of payment was in surplus in 2015 by 394 million euros, or 1.9% of GDP, making it nearly twice as large as in 2014. The growth in the surplus was driven mainly by reductions of 16% in the deficit on the goods account and of 14% in the deficit on the primary income account, which reflects labour and investment income. The balance of the goods and services account was in surplus by 820 million euros as exports of goods and services fell by 3% and imports by 4%.
The goods account deficit was 837 million euros, and narrowed mainly because imports of goods fell by 5% while exports fell at a slower 4%. The decline in both exports and imports was driven primarily by machinery and equipment and mineral products. Imports of goods crossing the Estonian border were 1.1 billion euros larger than exports going the other way. Estonian merchants earned 260 million euros from the intermediation of goods in third countries. The turnover of goods under merchanting was 17% of the total turnover of the goods account of the balance of payments, which is the same as last year.
The services surplus was only 1% below the record set in 2014 and stood at 1.7 billion euros. There was no particular change in the volumes of exports and imports. Sales abroad of most services were larger than the volumes bought in, and the reduction in the surplus for some types of service was balanced out by an increase in the surplus for other types. As people from Estonia travelled abroad more, the surplus on travel services decreased. A smaller volume of construction services was imported though, so the surplus on the construction services account increased. The surplus on the telecommunications, computer and information services account also increased, while that on the transport account shrank. About 60% of the services surplus came from travel, transport and other business services, down from 75% in 2014.
The net outflow from investment and other income1 was 427 million euros, or about 10% less than in the previous year. This was mainly because the inflow of income from portfolio and other investment increased while the outflow of direct investment income remained roughly the same. The direct investment income from Estonia for non-residents and the direct investment income from abroad of residents both declined. There was a preference for withdrawing earned income as dividends, meaning that reinvested income was smaller. Somewhat more was received from the European Union institutions in production subsidies than in 2014, but payments into the EU budget also increased. The net inflow of labour income remained at the same level as last year.
The surplus on the capital account almost doubled to 404 million euros. The growth came because more emissions quotas were sold than were bought in 2015, after more had been bought than sold in 2014. The volume of capital transfers, which are mainly investment support from the European Union Structural Funds, remained the same.
The net total of the current and capital accounts, or net lending (+) or borrowing (-), saw a surplus of 798 million euros. This means that the Estonian economy was again a net lender to other countries. A more detailed presentation of the statistics on foreign financing can be found on the Eesti Pank website http://www.eestipank.ee/.
1 Net flow is inflow minus outflow. If the inflow exceeds the outflow, there is a net inflow, if the outflow exceeds the inflow there is a net outflow.
See better graph from the website of the Bank of Estonia
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