Balance of payments – commentary
2025 Q2
Simultaneously with the publication of the 2025 Q2 balance of payments figures, revised data for 2025 Q1 are being published.
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The current account ended 2025 Q2 in a deficit of CZK 66.0 billion. The financial account recorded net inflow of funds (net borrowing) of CZK 36.0 billion due to higher transaction growth in external liabilities than external assets. The CNB’s reserve assets rose by CZK 12.4 billion (adjusted for valuation and price differences).
The result of the transactions was a current account surplus of 0.8% of GDP on an annual basis. The goods and services surplus was 5.7% of GDP.
Current account
Ratio of Current Account and Goods and Services Balance to GDP
(CZK billions, right-hand scale in %)
Note: Indicators calculated on the basis of annual moving aggregates
The goods and services balance recorded a surplus of CZK 117.4 billion in Q2. The balance fell by CZK 36.4 billion year on year at current prices. The goods balance ended in a surplus of CZK 94.5 billion, down by CZK 23.2 billion from a year earlier. The services balance also showed a surplus (CZK 22.9 billion), representing a year-on-year decrease in the surplus of CZK 13.2 billion. This decline was due mainly to year-on-year growth in imports of telecommunication services, computer and IT services, professional and management consulting services and transport services. The year-on-year decline in the services surplus was also due to an annual decrease in reinsurance exports. The total goods and services turnover at current prices was up by 4.6% year on year in Q2, amid a rise in exports of CZK 43.2 billion and an increase in imports of CZK 79.6 billion.
The primary income deficit was CZK 172.9 billion in Q2. Its year-on-year increase of CZK 24.2 billion was due mainly to a year-on-year rise in dividends paid to foreign direct investors. These dividends amounted to CZK 188.6 billion, representing a year-on-year increase of CZK 20.4 billion.
Secondary income ended Q2 in a deficit of CZK 10.4 billion (an improvement of CZK 1.3 billion on a year earlier). The improvement in the deficit was due mainly to an increase in the surplus on net income from the EU budget recorded in the secondary income balance.
The capital account
The capital account ended Q2 in a surplus of CZK 13.3 billion. The year-on-year decline in the surplus of CZK 31.8 billion was due to lower 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 36.0 billion in Q2 owing to external liabilities increasing more markedly than external assets.
Ratio of Financial Account to GDP
(CZK billions, right-hand scale in %)
Note: Indicators calculated on the basis of annual moving aggregates
Foreign direct investment saw a net inflow of funds totalling CZK 30.2 billion. Liabilities transactions included an increase in the share of foreign owners in the reinvested earnings of domestic companies and growth in loans provided to domestic companies from abroad. Conversely, the share of foreign parent companies in the equity capital of domestic companies decreased. The main factors on the asset side were an increase in the share of reinvested earnings by domestic owners in foreign subsidiaries and the repayment of domestic loans provided to foreign companies.
Portfolio investment recorded a net inflow of CZK 111.5 billion. On the liabilities side, this was related mainly to the sale of domestic bank bonds to foreign investors, which meant an increase in liabilities of CZK 146.3 billion, as well as non-residents’ purchases of bonds issued by other resident sectors (excluding general government and banks) of CZK 19.7 billion. On the assets side, this was due mainly to an increase in foreign equity and shares held by domestic investors (CZK 40.5 billion).
Derivatives trading recorded a net outflow of funds from abroad totalling CZK 5 billion.
Other investment saw an outflow (net lending) of CZK 88.3 billion. This outcome was significantly affected by a net outflow of other sector loans of CZK 52.1 billion and a net outflow of bank loans totalling CZK 38.1 billion.
The foreign exchange position of the banking sector (including the CNB) saw a net outflow of CZK 61.0 billion.
Within other investment, the position of other sectors recorded a net outflow of CZK 26.6 billion, due mainly to the repayment of short-term foreign loans (CZK 52.1 billion). By contrast, on the asset side, non-residents repaid short-term trade credits and advances abroad (CZK 40.4 billion).
The CNB’s own transactions and transactions for CNB clients resulted in an increase in reserve assets of CZK 12.4 billion (adjusted for valuation differences).