EXTERNAL DEBT

External debt statistics is based on the external claims and liabilities recorded in the international investment position, which are debts in their nature, i.e. they have to be repaid. Direct and portfolio investment into equity capital, reinvested earnings (retained earnings/loss of previous periods and equity capital reserves) and financial derivatives are excluded from debt accounting. In addition, neither the gold reserves of the central bank nor the special drawing rights are included in the external debt.

Major external debt indicators are:

	gross external debt - the amount of all debt-related external liabilities of all institutional sectors;
	net external debt - assets less liabilities, repayable by all institutional sectors.

Unlike the international investment position that reflects direct investment according to the directional principle, loans granted by resident direct investment companies to direct investors do not reduce direct investment liabilities, but are entered under the liabilities' side of the balance sheet in debt accounting. Similarly, Estonian residents' loans granted by non-resident direct investment companies are not subtracted from Estonia's direct investment claims abroad but are added to debt liabilities instead.