Estonia Q2 2007 Current Account Deficit

Estonia's current-account deficit narrowed in the second quarter from a 14-year high as slower consumer spending and credit growth cut imports, suggesting the Baltic economy is cooling somewha. The deficit, which offers a braod measure of the evolution of trade in goods and services, fell to 8.5 billion krooni ($770 million) or 14 percent of gross domestic product in Q2 2007, from a revised 21.9 percent of GDP in the first quarter and 15.2 percent in Q2 2006, according to data released by the central bank today.

Estonians it seems spent less on imported cars, clothes and household goods last quarter as interest costs rose and stricter lending requirements by banks took their toll. Lower domestic demand also slowed manufacturing and construction growth, reducing the rate of GDP growth in Q2 to the lowest level in 2 1/2 years.

Exports of goods rose 6 percent from a year earlier, increasing slightly more rapidly than imports which rose 5 percent increase. Services exports climbed 19 percent, while imports went up 18 percent.

Latvia's current-account gap, which is the widest in the European Union, narrowed to 23.5 percent of GDP in Q2 2007 as economic growth there slowed too.