OREANDA-NEWS. September 12, 2011. The current account of the balance of payments changed very little in the second quarter of 2011. Though investment grew rapidly, it did not result in a deterioration of the trade balance. Trade surplus was even larger than last year, making up 8% of the quarterly GDP, reported the press-centre of Eesti Pank.

This means that corporate profits and household savings still exceeded investment. However, due to the increase in the outflow of investment income, the current account surplus was smaller than a year ago. The outflow consisted in dividend payments, not in the imputed outflow of reinvested earnings.

Capital outflow through the financial account continued in the second quarter, but it accounted for just 2% of quarterly GDP. Against this background, the large and rapid turnover of funds was surprising. Although there were clearly defined periods of the inflow and outflow of funds, they balanced out by the end of the quarter. This reflected the centralised management of cash flows within international banking groups.

External financing stock increased about 3% in the second quarter. The inflow of direct investment in non-financial sector companies was notably larger than last year, whereas intra-group lending prevailed.

As a result, the outflow of funds predominated in the second quarter and Estonia's net external debt shrank to 21% of GDP. This means that the Estonian government, companies and also banks were lenders rather than borrowers.