Balance of payments
Simultaneously with the publication of the Q3 balance of payments figures, revised data for 2017 Q2 are being published. The revised data mainly take into account updated CZSO data on exports and imports of goods and services and, on the financial account, an update of data from statements submitted to the CNB by financial and non-financial entities.
The current account ended 2017 Q3 in a deficit of CZK 37.7 billion. The financial account recorded an inflow of funds (net borrowing) of CZK 2.1 billion owing to liabilities rising faster than assets. Reserve assets increased by CZK 13.4 billion (adjusted for valuation differences) as a result of transactions for CNB clients. The current account surplus was 0.6% of GDP (on an annual basis) owing to a decline in the goods and services surplus and an increase in the primary and secondary income deficits. The goods and services surplus was almost unchanged at 7.2% of GDP.
The current account
Ratio of Current Account and Goods and Services Balance to GDP
(CZK billions, right-hand scale in %)
The goods and services balance ended Q3 in a surplus of CZK 70.4 billion. The year-on-year decrease of CZK 2.4 billion was due to a lower goods surplus, while the services surplus increased slightly year on year. There was an increase in receipts from goods processed for foreign owners, from pipeline transport and from electricity transmission, accompanied by a drop in imports of repair services. The travel surplus decreased year on year due to growth in spending by Czech nationals abroad.
The primary income deficit widened by CZK 6.7 billion year on year due to a rise in reinvested earnings for foreign owners of domestic corporations and lower income from the EU budget recorded under primary income. The resulting deficit was CZK 93.9 billion.
Secondary income showed a deficit of CZK 14.2 billion, up by CZK 5.7 billion year on year. This was due to a decrease in income from the EU budget, which is recorded under secondary income.
The capital account
The capital account ended Q3 in a surplus of CZK 8.3 billion. The year-on-year drop in the surplus of CZK 3.8 billion was due to a decline in net income from the EU budget recorded on the capital account.
The financial account
The financial account (including the change in the CNB’s reserve assets) recorded a net inflow (net borrowing) of CZK 2.1 billion owing to external liabilities rising faster than external assets.
Ratio of Financial Account to GDP
(CZK billions, right-hand scale in %)
Direct investment recorded a net inflow of CZK 11.9 billion. The main factors were reinvestment of earnings by foreign owners in domestic corporations and loans drawn from corporations within a direct investor’s group.
Portfolio investment saw a net outflow (net lending) of CZK 152.6 billion due to a decline in holdings of government bonds by foreign investors. Portfolio investment declined by CZK 137.2 billion on the liabilities side. On the asset side, domestic investors purchased foreign equity and debt securities totalling CZK 15.4 billion.
Derivatives trading recorded an inflow of CZK 6.7 billion.
Other investment saw an inflow (net borrowing) of CZK 149.5 billion.
The banking sector recorded a change in the position of banks as a result of an increase in short-term deposits accepted. The net inflow including the CNB (excluding reserve assets) was CZK 134.5 billion.
The corporate sector saw a net inflow of CZK 18.8 billion, due mainly to drawdown of financial loans.
The government sector made repayments of loans drawn in the past and recorded a net outflow totalling CZK 3.7 billion.
A surplus on transactions for CNB clients resulted in an increase in reserve assets of CZK 13.4 billion (adjusted for valuation differences).