Balance of payments – commentary

July 2024

The current account deficit amounted to CZK 13.7 billion in July. The goods and services balance ended in a surplus of CZK 17.0 billion. Direct investment dividends totalling CZK 35.9 billion were recorded on the debit side of the primary income balance. Income and capital transfers included a surplus of CZK 5.3 billion vis-à-vis EU institutions.

Current account
(CZK billions)

Net capital inflows on the financial account (net borrowing) reached CZK 16.4 billion in July, amid a decline in assets (CZK 7.6 billion) and growth in liabilities (CZK 8.8 billion) vis-à-vis the rest of the world. The net capital inflow within foreign direct investment was CZK 5.1 billion. Portfolio investment recorded a net capital inflow of CZK 28.0 billion, linked mainly to an increase in non-residents’ holdings of debt securities issued by resident banks (CZK 14.4 billion) and general government (CZK 9.3 billion).

Direct and portfolio investment
(CZK billions)

Other investment recorded a net outflow of capital of CZK 8.7 billion amid a faster decline in liabilities (CZK 27.2 billion) than in assets (CZK 18.6 billion). On the asset side, this was associated mainly with a decline in deposits of resident banks (CZK -26.1 billion). Liabilities declined in July due mainly to a drop in non-residents’ deposits with domestic banks (CZK 48.0 billion), partly offset mostly by growth in loans to other sectors from non-residents (CZK 11.8 billion) and growth in non-residents’ deposits in the central bank (CZK 7.2 billion). International reserves picked up by CZK 13.7 billion in July owing to financial transactions.