The Czech Republic’s international investment position and external debt
as of 31 March 2025
In 2025 Q1, the Czech Republic’s international investment position (i.e. the balance of its financial assets and liabilities in respect of non-residents) recorded an increase in deficit of CZK 140.9 billion to CZK 716.4 billion at the end of March 2025. The deficit dropped by CZK 155.3 billion in year-on-year terms and represented 8.8% of GDP at current prices. The gross external debt of residents of the Czech Republic amounted to CZK 5,302.9 billion at the end of Q1 (i.e. 65.4% of GDP). It recorded a year-on-year increase of CZK 320.9 billion. The net external debt of residents of the Czech Republic amounted to CZK -810.2 billion at the end of Q1. Net external debt is the difference between external debt liabilities and assets. A negative value thus indicates that residents of the Czech Republic were in a net creditor position vis-à-vis the rest of the world (10% of GDP).
Chart 1 – International investment position
(CZK billions, end-of-period balance)
External assets increased by CZK 15.4 billion to CZK 9,780.4 billion in Q1. The assets rose by CZK 743.4 billion year on year.
Chart 2 – Structure of investment position assets
(CZK billions, end-of-period balance)
The external assets of the banking sector (including the CNB and excluding portfolio investment and derivatives) decreased by CZK 75.1 billion in Q1, constituting 43.1% of total assets. This was largely due to a decline in the CNB’s reserve and other assets, which amounted to CZK 59.5 billion. The share of the CNB’s reserve and other assets in total investment position assets was 35.7%.
The external assets of other sectors (excluding the government and banking sectors, and excluding portfolio investment and derivatives) increased by CZK 74.9 billion in Q1 due mostly to an increase in the share of domestic owners in foreign subsidiaries by CZK 29 billion and a rise in inter-company loans to foreign subsidiaries by CZK 7.9 billion. An increase of CZK 16.3 billion in short-term trade credits and advances provided to corporations not associated with direct investment and a rise in deposits of CZK 15.8 billion were other major factors. The external assets of other sectors (excluding the government and banking sectors, and excluding portfolio investment and derivatives) accounted for 39.8% of total investment position assets.
The value of domestic investors’ holdings of foreign securities (portfolio investment) rose by CZK 32.8 billion mainly due to purchases of ownership interests and bonds by non-bank domestic investors. Their share in total investment position assets is 14.5%.
The positive fair value of derivatives decreased by CZK 14.5 billion in Q1, accounting for 1.4% of total investment position assets.
The external assets of the general government sector (excluding portfolio investment and derivatives) decreased by CZK 2.7 billion in Q1 as a result of a drop in long-term loans provided, and the share of general government assets in total assets amounts to 1.1%.
Investment position external liabilities rose by CZK 156.3 billion in Q1 to CZK 10,496.8 billion at the end of March 2025. In year-on-year terms the liabilities increased by CZK 588.1 billion.
Chart 3 – Structure of investment position liabilities
(CZK billions, end-of-period balance)
Direct investment liabilities increased by CZK 136.5 billion in Q1, accounting for 58.7% of total external liabilities. Foreign investors increased their shares in domestic subsidiaries, while domestic companies simultaneously drew loans from foreign parent companies, affiliates and subsidiaries.
Developments in portfolio investment liabilities abroad were driven mostly by the sale of domestic short-term bank debt securities by non-residents. The resulting volume of liabilities decreased by CZK 125.4 billion, with portfolio investment representing 15.5% of total liabilities.
The negative fair value of derivatives declined by CZK 32.8 billion in Q1, accounting for 1.4% of total liabilities.
The Czech Republic’s external debt (the sum of its liabilities with stipulated maturity) rose by CZK 31.9 billion in Q1, totalling CZK 5,302.9 billion at the end of March 2025. In year-on-year terms, the debt increased by CZK 320.9 billion. As regards the time structure of the external debt, the share of liabilities with original maturities longer than one year was 49.9% of total debt liabilities.
Chart 4 – External debt by debtor
(CZK billions, end-of-period balance)
Turning to the sectoral breakdown of the external debt, Q1 saw an increase in the debt of other sectors (CZK 29.5 billion), driven mainly by a quarter-on-quarter rise in inter-company loans within foreign direct investment (CZK 33.1 billion). The share of other sectors accounted for 46.6% of the total external debt.
In Q1, the external debt in the banking sector (including the CNB) increased by CZK 6.7 billion, whereas the external debt of the general government sector decreased by CZK 4.4 billion. The banking sector (including the CNB) accounted for 37.7% of the total external debt and the general government sector accounted for 15.7% of the total external debt.
Turning to the breakdown of the external debt by instrument, deposits and loans from subsidiaries are the most frequently used forms of debt financing (together accounting for 55.6% of the external debt).
Chart 5 – External debt by instrument
(CZK billions, end-of-period balance)
The external debt of the private sector accounted for 77.7% of the total external debt. The remainder (22.3%) is made up of public sector liabilities which include government sector liabilities, liabilities of private entities guaranteed by the government and liabilities of entities majority-owned by the state.
Chart 6 – External debt of public and private sectors
(CZK billions, end-of-period balance)
