No 2 (217) 26 March 2001

ESTONIA'S INTERNATIONAL INVESTMENT POSITION AND EXTERNAL DEBT
as of 31 December 2000

Due to the predominance of external liabilities, Estonia's net investment position at the end of 2000 was negative by 46.9 billion kroons, which makes 55.7% of the anticipated gross domestic product (GDP). This figure exceeded the end-1999 by 3.5 billion kroons (see Table 1).

Estonia's economic sectors had invested abroad 44 billion kroons (52% of Estonia's anticipated GDP). Investments in foreign countries increased by 6.4 billion kroons in 2000 whereas direct investments were responsible for 47%. The increasing gold and foreign currency reserves of the central bank yielded 34% of the investment growth. The reserves were still responsible for 35% of all investments made abroad. Figures 1 and 2 display the structure of Estonia's direct investments by countries and spheres of activity.

90.9 billion kroons of foreign investments had been made in Estonia by end-2000 (108% of anticipated GDP). Here the annual growth due to the balance of payments transactions (including growing reinvestment of earnings), changes in exchange rate and securities prices was 10 billion kroons (12%). The 49% share of FDI in all investments made in Estonia reflects investors' lasting interest. Several investors have increased their direct investments at the expense of portfolio investments, reducing, thus, Estonia's portfolio investment liabilities in equity securities against end-1999.

At the end of 2000 the majority of the FDI inflow had quite evenly been distributed between finance (25%), transport, storage and communication (22%) and industry (21%). Sweden (41%) and Finland (30%) are responsible for most of the FDI. Figures 3 and 4 display the structure of the FDI in Estonia by countries and spheres of activity.

Including only debts in external claims and liabilities, Estonia's gross foreign debt was 50.9 billion kroons at the end of 2000, 60% of the anticipated GDP (see Table 2). The annual growth was 6 billion kroons. Estonia's net foreign debt at the end of 2000 was 8.3 billion kroons (10% of GDP) and increased by a mere 0.5 billion kroons over the year. The net foreign debt of the government sector was just 1.8 billion kroons (2.1% of GDP).

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Estonia's international investment position as of end of the first quarter of 2001 will be published at the Eesti Pank web site at noon on 25 June 2001.

International and Public Relations Department of Eesti Pank

PS Please acknowledge the source when publishing or citing.
Ants Kaasik
Executive Editor

Table 1. Estonia's international investment position and external debt (EEK mn)(1)

(1) From 2000 the table contains more detailed information

Table 2. External debt (EEK mn)(1)

(1) After additional information is received, data of the earlier periods have been updated accordingly.

Figure 1. Direct investments made abroad by countries as of 31 December 2000

Figure 2. Direct investments made abroad by spheres of activity as of 31 December 2000

Figure 3. Direct investments made into Estonia by countries as of 31 December 2000

Figure 4. Direct investments made into Estonia by spheres of activity as of 31 December 2000