OREANDA-NEWS. October 25, 2012. At the end of the second quarter of 2012, the stock of corporate debt was about 6% larger than a year ago. Compared to the first quarter, debt obligations had increased 2% A majority of the increase occurred due to the bond issue of a large state enterprise without which the corporate debt level would have remained unchanged from that of the first quarter, and been 4% annually, reported the press-centre of Eesti Pank.

Corporate financial assets have grown even faster than debt liabilities, posting a near-10% increase year-on-year, and a 1.3% pickup quarter-on-quarter. Financial assets expanded mostly owing to rapid deposit growth. In addition, corporate claims vis-a-vis other companies and the external environment have increased along with the pickup in economic activity in recent years.

Contrary to the corporate sector, households were net lenders in the second quarter of 2012. Deposits contributed the most to asset growth, having increased about 9% compared to a year ago. At the same time, the value of households’ financial investment decreased. On the liabilities side, the decline in households’ loan liabilities, which had been going on for more than three years, stopped in the second quarter, so the debt level remained close to that recorded at the end of the first quarter.

Household indebtedness (i.e., the debt-to-GDP ratio) contracted further owing to GDP growth, to 45.6%. Compared to the peak of 2009, the indicator has decreased by more than 13 pp.

The general government was a net lender in the second quarter, whereas all sub-sectors performed that role. Guarantees provided via the EFSF added 123 million euros to both the assets and the liabilities side.

The Estonian economy as a whole became a net borrower again, after more than three years. Net borrowing amounted to 41 million euros (about 1% of the quarter’s GDP). The negative balance was for the most part the result of the bond issue of a large state enterprise.