Balance of payments – commentary

August 2019

The current account deficit amounted to CZK 10.7 billion in August. The debit side of the primary income balance included dividends on direct investment of CZK 30.4 billion. The goods and services balance recorded a surplus of CZK 27.1 billion. Primary and secondary income included a deficit of CZK 1.2 billion on transfers from the Czech Republic to the EU budget. On the capital account, a total of CZK 15.6 million was drawn from the EU budget.

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

The inflow of capital on the financial account (net borrowing) totalled CZK 2.9 billion owing to liabilities rising faster than assets. The net outflow of foreign direct investment was CZK 0.7 billion, of which net reinvested earnings amounted to CZK 5 billion. The net portfolio investment outflow of CZK 3.6 billion (net lending) was related on the asset side to an increase in residents’ holdings of foreign debt securities.

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

Other investment recorded an inflow of capital (net borrowing) of CZK 5 billion. The other capital inflow was due chiefly to a change in the short-term international position of the banking sector. Transactions for CNB clients resulted in an increase in international reserves of CZK 2.1 billion (adjusted for valuation differences).