Estonia s balance of payments was in deficit by â¬323 million over the year to the first quarter of 2021 (Q1 2021) the Bank of Estonia (Eesti Pank) says. The deficit stood at 4.7 percent of gross domestic product (GDP).
The current account of the balance of payments had been in surplus to the tune of 4.3 percent of GDP in Q1 2020, transforming to a 4.7 percent of GDP deficit a year later.
Total turnover of goods and services in Q1 2021 grew by 12.7 percent on year, however.
The current account and the international investment position remained within the limits of the criteria for macroeconomic imbalance, the central bank says.
Rapid economic growth in the first quarter of 2021 (Q1 2021) bears the hallmarks of a potential economic boom which might come in the latter half of this year, and is not simply the result of a comparison with a low base reference in 2020 and the downturn sparked by the arrival of the pandemic, the Bank of Estonia (Eesti Pank) says.
According to the International Monetary Fund (IMF), Estonia should support the economy while exiting the crisis, after which the country needs a concrete plan to gradually restore budget buffers.
According to both the IMF and the Bank of Estonia, Estonia has been generally successful in navigating the coronavirus pandemic, although the second wave put a significant halt to the economy s recovery.
The state should support the economy s recovery from the state budget until recovery is at a certain pace. The IMF and the central bank find that a balance must be found between maintaining budget discipline and increasing productive public spending in the future.
Bank of Estonia (Eesti Pank) governor Madis Müller says that while support from state credit agency KredEx could be pressed into action in getting home loan purchases up and running in rural areas and outside of the capital city and its environs – particularly for young families – the government also needs to rethink conditions under which loan guarantees are currently being offered.
The central bank s main concern is as much rapidly rising real estate prices as it is loan volume growth.
Speaking on ETV political discussion show Esimene stuudio Thursday night, Müller said: It is probably necessary to offer help in buying a home outside Tallinn, for example, where the value of real estate in terms of collateral is not as secure as a Tallinn apartment. I absolutely agree that the state could support young families in buying their first home.
Turnover of domestic clients increased by 6.7 percent on year to the first quarter of 2021 (Q1 2021), the Bank of Estonia reports, while the number of payments over the same period rose 7.2 percent.
Between Q4 2020 and Q1 2021, domestic client payments rose 0.4 percent, while the number fell 1.1 percent.
The turnover of domestic payments excluding card payments in Q1 2021 stood at €38.4 billion, while the number of payments totaled 46.6 million, the central bank says.
Turnover of card payments at points of sale fell to Q1 2021, however, likely the effect of the coronavirus pandemic and its restrictions.
The turnover of cross-border payments sent came to €18.6 billion (a rise of 42.0 percent on year to Q1 2021), across 4.5 million payments (up 43.5 percent over the same period).