• The surplus on the current account of the Estonian balance of payments was 77 million euros in the third quarter of 2018, or 1.2% of GDP, which was less than one third of the surplus in the third quarter of 2017. The decline in the surplus was mainly caused by substantial growth in the deficit on the goods account and a fall in the surplus in services.
• The net outflow of capital shown in the financial account^[1] was 75 million euros. It was primarily a consequence of investments in corporate debt securities maturing and of investment in foreign securities by pension funds.
• The international investment position showed that the external liabilities of Estonian residents increased during the quarter by 121 million euros more than their external assets did.
• The volume of debt assets of Estonian residents fell by 93 million euros over the quarter, while debt liabilities^[2] fell by 193 million euros.

The current account of the Estonian balance of payments was in surplus by 77 million euros in the third quarter of 2018. The deficit in goods was 348 million euros, which was the largest of recent years and was 73% more than in the third quarter of 2017. It grew mainly because of a drop in net exports of goods under merchanting and a rise in imports of machinery and equipment, metals and metal products, and pharmaceutical products. The surplus in services was 526 million euros, which was a little less than in the same quarter of the previous year. Turnover of services remained at record high levels though, as exports of services increased by 7% over the year and imports grew by 14%. The net outflow of investment income was 226 million euros, which was 7% less than a year earlier and was mainly due to a reduction in the net outflow of direct investment income from non-financial companies. The surplus on the capital account was 92 million euros, which was 63% more than a year earlier, principally because no emissions quotas were bought in the third quarter of this year, unlike in the third quarter of last year. The volume of investment support remained the same.

The net total of the current and capital accounts, or net lending (+) or borrowing (-), saw a surplus of 169 million euros in the third quarter of 2018. This meant that the Estonian economy was again a net lender to other countries, so the country as a whole invested more financial assets abroad than it received from there.

The financial account of the balance of payments shows that investment abroad from Estonia was 75 million euros larger in the third quarter of 2018 than investment in Estonia from abroad. The net capital outflow was primarily a consequence of investments in the debt securities of non-financial companies maturing and of investment in foreign securities by pension funds. The net inflow of investment through the banking system^[3] was 233 million euros and occurred through a reduction in resident deposits and lending to residents by Estonian banks. This allowed residents to spend more on imported goods and services and to reduce their own liabilities. The inflow of direct investment was 137 million euros bigger than the outflow. This was again based on non-financial companies and credit institutions reinvesting the profits they had earned in Estonia.

The net international investment position at the end of the third quarter of 2018 showed that the external liabilities of Estonian residents exceeded their external assets by 7.3 billion euros, or 29% of the GDP of the previous four quarters.

Statistics for the gross external debt show that at the end of the quarter, the debt assets of Estonian residents on non-residents were 4 billion euros, or 16% of GDP for four quarters, larger than their debt liabilities. Both debt assets and debt liabilities shrank during the quarter.

For more detail on the financial account, the international investment position and the external debt see the external sector statistics.