Balance of payments – commentary

April 2022

The current account deficit was CZK 10.2 billion in April, owing to a deficit on the goods and services balance. The debit side of the primary income balance included direct investment dividends of CZK 2.2 billion. Primary and secondary income included a surplus of CZK 14.2 billion on transfers to the Czech Republic from the EU budget. The capital account included income from the EU budget amounting to CZK 9.4 billion.

Current account
(CZK billions)
Balance of payments – monthly – chart 1 – Current account

The inflow of capital on the financial account (net borrowing) totalled CZK 32.5 billion, owing to liabilities increasing faster than assets. The net foreign direct investment inflow reached CZK 18.7 billion, of which net reinvested earnings were CZK 7.8 billion. The net outflow of portfolio investment of CZK 190.7 billion (net lending) was affected on the liabilities side by a sizeable drop in banks’ external liabilities in the form of short-term bonds.

Direct and portfolio investment
(CZK billions)
Balance of payments – monthly – chart 2 – Direct and portfolio investment

Other investment recorded a net inflow of capital (net borrowing) of CZK 299.2 billion. The inflow of other capital was affected by a change in the banking sector’s short-term international position. Transactions executed for CNB clients (adjusted for valuation changes) led to an increase in international reserves of CZK 95.9 billion.