Uncertainty plays an important role in saving. The performance of the Estonian economy is overshadowed by uncertainty that has accompanied the stalling of efforts to find solutions to several global problems. Many issues like tariff battles between large economic regions, the dragged-out Brexit, problems in the German car industry, and difficulties in Italy and France do not affect Estonia very directly, but rather through the general deterioration in demand, sentiment and confidence. In an uncertain environment there is not the confidence to maintain earlier patterns of consumption and investment, while savings are built up more in order to guard against possible problems. Increased uncertainty leads to additional cutbacks and precautionary saving.

Estonia’s exports have so far weathered the uncertainty well. Balance of payments statistics show that Estonian exports of goods and services were 7.2% more in the third quarter than a year earlier at current prices. Exports of goods grew strongly by 7.5% and exports of services grew by 6.5%. This was a lot more than in the second quarter, when Estonian exports were up 4.5%, and was notably above the growth in foreign demand. There were several one-off factors behind this strong growth, such as an exceptionally good harvest in agriculture, and the numbers in the coming months will be more modest. Expectations for further growth in Estonian exports have already become quite pessimistic.

The Estonian current account surplus increased to 2.8% of GDP in the third quarter. This result was boosted in the third quarter by the faster growth in exports and by the slower growth in imports. Imports of Estonian goods and services grew by 4.7% in the third quarter, having posted 6.3% in the second. The increased surplus on the current account means that the income received from abroad was larger than expenditures there. More went into savings than earlier and more was invested abroad from Estonia than was received in Estonia from foreign countries. Deepening uncertainty makes people more cautious, and they search for protection against risks that could substantially harm their ability to consume in the future.

Eesti Pank releases an economic policy comment on the external sector statistics it collects and a statistical release on the balance of payments statistics that discusses changes in the current and capital accounts, the financial account, the international investment position and the external debt.

Additional information:
Mart Siilivask
Eesti Pank
Tel: 668 0965,
Mobile: 5697 9146
Email: mart.siilivask@eestipank.ee

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