Current account in surplus and the net international investment position strengthened in the second quarter of 2021

Corrected 13 October 2021. Appendix table 4 was corrected. The corrections are indicated in red.

The current account was EUR 0.2 billion in surplus in the second quarter of 2021. The value of goods exports in balance of payments terms grew by 19 per cent from twelve months back. Goods imports increased by 22 per cent. At the same time, the value of service exports increased by nine per cent year-on-year, while the value of service imports rose by seven per cent. The primary income account was in surplus. Compared to the previous quarter, the net international investment position strengthened. The data appear from Statistics Finland's statistics on balance of payments and international investment position.

Current account and goods and services account

Current account

In the second quarter of 2021, the current account was EUR 0.2 billion in surplus. The four-quarter moving total of the current account was EUR 4.1 billion in surplus. The balance of goods and services was in balance. Of the sub-items of the current account, the primary income account was EUR 0.9 billion in surplus and the secondary income account was EUR 0.8 billion in deficit.

Goods and services

The goods account in balance of payments terms was EUR 0.8 billion in surplus in the second quarter. In the corresponding quarter of the previous year, the goods account was EUR 0.9 billion in surplus. The service account showed a deficit of EUR 0.7 billion in the second quarter of 2021.

The value of goods exports in balance of payments terms increased by 19 per cent year-on-year and was EUR 16.7 billion at the same time as the value of goods imports in balance of payments terms grew by 22 per cent year-on-year to EUR 15.9 billion. The value of service exports grew by nine per cent year-on-year and was EUR 6.2 billion. The value of service imports rose by seven per cent year-on-year to EUR 6.9 billion.

More detailed import and export figures in balance of payments terms by service item and area can be found in the statistics on international trade in goods and services starting from 2013. Decreases and increases made to the Finnish Customs figures, which result in goods trade in balance of payments terms, are also broken down in the statistics on international trade in goods and services.

Finland’s current account and goods and services account, 12 –month moving sum

Primary income

A total of EUR 0.9 billion were paid in primary income on net to Finland in the second quarter of 2021. Primary income paid from Finland abroad amounted to EUR 4.6 billion, while primary income paid from abroad to Finland totalled EUR 5.5 billion.

In the second quarter of 2021, property income paid to Finland on net amounted to EUR 0.9 billion, while property income paid to Finland from abroad amounted to EUR 5.2 billion and property income paid abroad from Finland to EUR 4.3 billion. Most property income on net from abroad to Finland was paid in the form of direct investments, EUR 1.5 billion in the second quarter.

The secondary income account was EUR 0.8 billion in deficit in the second quarter of 2021.

Financial account and net international investment position

Gross liabilities bigger than gross assets

At the end of the second quarter of 2021, Finland had EUR 888.0 billion in gross foreign assets and EUR 892.4 billion in gross foreign liabilities. The net international investment position, that is, the difference between gross assets and liabilities, was thus EUR -4.4 billion as there were more liabilities than assets. Gross liabilities grew from the first quarter due to an increase in the liabilities stock of portfolio investments. Portfolio investments also increased the stock of gross assets.

The net international investment position strengthened slightly from the first quarter of 2021 when the net international investment position was EUR -4.5 billion. Financial transactions stood for EUR 3.6 billion of the change in the net international investment position and changes in prices, exchange rates and other classifications stood for EUR -3.5 billion.

Finland’s net international investment position quarterly

Portfolio investments abroad and to Finland grew

Examined by type of investment, most foreign assets were in the form of portfolio investments at the end of the second quarter of 2021. Portfolio investment assets grew from the previous quarter. At the end of the second quarter of 2021, there were EUR 405.8 billion in portfolio investment assets, while assets amounted to EUR 386.6 billion in the previous quarter. The change in stocks is explained by financial transactions and value changes in portfolio investments. Portfolio investments abroad increased by EUR 8.7 billion and changes in prices, exchange rates and other classifications were EUR 10.5 billion. Of portfolio investment assets, EUR 135.6 billion were in bonds and money market instruments and EUR 270.2 billion in equity and mutual fund shares.

The share of portfolio investments is also highest in foreign liabilities. The stock of portfolio investment liabilities amounted to EUR 463.2 billion at the end of the second quarter of 2021. Portfolio investment liabilities increased from the previous quarter, when the stock stood at EUR 446.3 billion.

When examining the net international investment position by type of investment, it can be seen that the biggest net assets were in direct investments, while the largest net liabilities were in the form of portfolio investments. At the end of the second quarter of 2021, net assets in direct investments amounted to EUR 40.0 billion and net liabilities in portfolio investments to EUR 57.4 billion. The large net liabilities of portfolio investments are explained by the net liabilities of EUR 137.7 billion in bonds and money market instruments. Assets in equity and mutual fund shares were EUR 80.3 billion larger than liabilities.

Net capital inflow to Finland

In the second quarter of 2021, net capital outflow from Finland abroad amounted to EUR 3.6 billion. Net capital outflow from Finland abroad was highest in the form of portfolio investments, EUR 4.1 billion. Net capital outflow from Finland abroad in the form of direct investments amounted to EUR 1.0 billion. Correspondingly, net capital inflow to Finland from abroad was highest in the form of other investments, EUR 1.9 billion.

Social security funds had largest net assets

When the net investment position is examined by investor sector, most foreign net assets, EUR 177.9 billion, were held by social security funds, of which employment pension schemes are the most important ones. EUR 147.5 billion of social security funds’ net assets were in the form of equity and mutual fund shares and EUR 27.2 billion in the form of money market instruments and bonds. The net assets of social security funds grew from the previous quarter primarily as a result of price changes in assets of equity and mutual fund shares. Net liabilities were held most by other monetary financial institutions, EUR 168.2 billion. The net investment position of monetary financial institutions weakened from the first quarter of 2021 due to the increase in the net liabilities of other investments and portfolio investments.

Source: Balance of payments and international investment position, Statistics Finland

Inquiries: Marianna Mukkulainen 029 551 3405, Johannes Nyk�nen 029 551 3641, balanceofpayments@stat.fi.

Head of Department in charge: Katri Kaaja

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Updated 17.9.2021

Referencing instructions:

Official Statistics of Finland (OSF): Balance of payments and international investment position [e-publication].
ISSN=2342-348X. 2nd quarter 2021. Helsinki: Statistics Finland [referred: 22.11.2024].
Access method: http://www.stat.fi/til/mata/2021/42/mata_2021_42_2021-09-17_tie_001_en.html