Estonian c/a deficit falls to three-year low
Reuters
June 30, 2008
TALLINN, June 30 (Reuters) - Estonia's current account deficit fell to a three-year low of 13.3 percent of expected GDP in the first quarter of 2008 as private consumption dried up, the central bank said on Monday.
As economic growth stalls for the small Baltic country and consumer confidence drops, Estonia's worryingly high current account deficit is also easing from the all time high of 23.7 percent in the same period a year ago and heading towards the last low of 10.5 percent in the forth quarter of 2005.
"The easing in domestic demand, which had started in 2007 and continued also in 2008, had a considerable impact on Estonia's foreign trade balance," the central bank said in a statement.
It added the deficit on the goods account -- the largest component in the current account deficit -- decreased by 25 percent both year-on-year and quarter-on-quarter totalling 7.6 billion kroons.
The current account deficit reached 7.9 billion kroons ($800 million) in the first quarter compared to 10.5 billion kroons in the fourth quarter of 2007.
Estonia has been warned over the years that its high current account deficit could bring currency instability and weaker investor confidence in the small open economy. ($1=9.9 kroons) (Reporting by David Mardiste)
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