Balance of payments, 4th quarter 2023
Increased exports and decreased imports of goods contribute to a current account surplus
Statistical news from Statistics Sweden 2024-03-06 8.00
The current account surplus amounted to SEK 116.7 billion during the fourth quarter of 2023, which is an increase by SEK 8.7 billion compared to the fourth quarter of 2022. The increase is due to a strengthened trade balance, which can be explained by increased exports and decreased imports of goods. The current account surplus is reduced by a negative balance of services.
”The current account surplus continues to increase, mainly due to a strengthened trade balance.” says Viktor Penna, economist at the Balance of Payments section.
Sweden’s net external assets position amounted to SEK 2 091.7 billion at the end of the fourth quarter of 2023. The financial account shows that net lending with the rest of the world amounted to SEK 66.0 billion during the same quarter.
What is the balance of payments?
The balance of payments is a statement of all Swedish transactions with the rest of the world. It presents exports and imports of goods and services. It also includes a description of changes in financial assets and liabilities with the rest of the world. The balance of payments consists of the current account, the financial account, and the capital account. The component parts of the balance of payments and related terms are explained under Definitions and explanations, at the end of this item of statistics news.
Current account surplus as share of Sweden’s GDP
In the fourth quarter of 2023, Sweden’s current account as a share of GDP amounted to 6.8 percent of Sweden’s GDP. For the third quarter of 2023, the share was 6.7 percent. This proportion is calculated as a moving average over the last four quarters.
Comparisons between periods in the current account are made using the corresponding quarter the previous year.
Exports of goods increased and imports of goods decreased
Trade in goods showed a surplus of SEK 104.2 billion in the fourth quarter of 2023. This is an increase of SEK 42.1 billion compared with the fourth quarter of 2022. Exports of goods amounted to SEK 620.5 billion, which is an increase of SEK 26.0 billion compared with the corresponding quarter a year ago. Imports of goods amounted to SEK 516.3 billion, down by SEK 16.1 billion in a corresponding comparison.
Surplus in merchanting, which is included in the balance on trade in goods, increased by SEK 6.4 billion compared with the fourth quarter of 2022. The surplus thus amounted to SEK 67.4 billion in the fourth quarter of 2023.
Trade in services noted a deficit of SEK 9.8 billion. This can be compared with a surplus of SEK 8.1 billion in the corresponding quarter last year. Imports of services amounted to SEK 310.4 billion, up by SEK 25.3 billion compared with the fourth quarter of 2022. At the same time, exports of services noted an increase of SEK 7.4 billion in a corresponding comparison and amounted to SEK 300.6 billion.
Primary income surplus decreased
Primary income, which mainly consists of compensation of employees and investment income, presented a surplus of SEK 47.6 billion in the fourth quarter of 2023. This surplus decreased by SEK 13.6 billion compared with the corresponding quarter a year ago. The surplus in investment income went from SEK 60.4 billion in the fourth quarter of 2022 to SEK 47.1 billion in the fourth quarter of 2023.
The biggest changes in the investment income were in other investment followed by portfolio investment. Investment income on other investment contributed a deficit of SEK 15.1 billion, the deficit has thus increased by SEK 8.3 in the corresponding quarter a year ago. Investment income on the portfolio investment contributed a surplus of SEK 1.4 billion, decreasing by SEK 6.4 billion in the same comparison.
Secondary income deficit increased
Secondary income, which includes international cooperation and donations and contributions to the EU, presented a deficit of SEK 25.3 billion. This deficit increased by SEK 1.8 billion compared with the corresponding quarter a year ago.
Net lending in the financial account
The financial account presented net lending amounting to SEK 66.0 billion in the fourth quarter of 2023. Net lending and net borrowing refer to the overall balance on the financial account.
During the fourth quarter of 2023 direct investment, other investment and reserve assets noted net lending. Portfolio investment and financial derivatives noted net borrowing.
Direct investment increased both in Sweden and abroad
Net lending in direct investment amounted to SEK 5.0 billion during the quarter. Foreign direct investment in Sweden increased by SEK 87.1 billion and Swedish direct investment abroad increased by SEK 92.1 billion.
Portfolio investment increased in Sweden and decreased abroad
Net borrowing in portfolio investment amounted to SEK 163.2 billion during the quarter. Foreign investors increased their portfolio investment in Sweden by SEK 128.1 billion, and Swedish investors decreased their portfolio investment abroad by SEK 35.1 billion.
Other investment increased in Sweden and decreased abroad
Net lending in other investment corresponded to SEK 237.9 billion. Swedish other investment abroad increased by SEK 4.4 billion, and foreign other investment in Sweden decreased by SEK 233.5 billion.
Financial derivatives and reserve assets
Net borrowing in financial derivatives amounted to SEK 17.9 billion. Reserve assets noted increased net lending corresponding to SEK 4.2 billion.
Net assets in Sweden’s international investment position decreased
Sweden’s net external assets position amounted to SEK 2 091.7 billion for the fourth quarter of 2023, which is a decrease compared with SEK 2 373.5 billion in the previous quarter.
Swedish external assets and liabilities decreased
During the fourth quarter, Swedish external assets amounted to SEK 19 760.5 billion, a decrease of SEK 544.9 billion compared with the previous quarter. Swedish external liabilities decreased by SEK 263.1 billion compared with the previous quarter and amounted to SEK 17 668.8 billion.
Portfolio investment increased both in Sweden and abroad. Financial derivatives and other investment decreased both in Sweden and abroad. Swedish direct investment assets abroad decreased whereas foreign assets in Sweden increased. Reserve assets abroad decreased.
Revisions
The Balance of Payments adheres to a predetermined revision policy, see Section 2.3 in the 2023 Quality Declaration. Kvalitetsdeklaration, Betalningsbalans och utlandsställning, 2023 (scb.se) (pdf)
The time series for the balance of payments and international investment position have been revised from the first quarter of 2020.
In a compilation of the balance of payments and the international investment position, data based on forecasts are used in some cases. These statistics will be updated as results are received. If new data is added or in the case of any methodological changes, further revisions are carried out as necessary.
Revisions carried out in connection with publication of the fourth quarter of 2023 are listed in the tables on revisions by account item for the balance of payments and the international investment position, respectively.
Definitions and explanations
The current account and the financial account record real and financial transactions regarding the rest of the world. Only proper transactions are recorded; value changes, such as exchange rate fluctuations are excluded.
The current account shows the trade in goods (foreign trade in goods), the trade in services (foreign trade in services), primary income (compensation to employees, investment income, other primary income), and secondary income (current transfers). Surplus and deficit in the current account refer to the difference between Sweden’s exports and Sweden’s imports. A positive outcome results in a surplus, while a negative outcome results in a deficit. Comparisons between periods in the current account are always made using the corresponding quarter the previous year, due to seasonal patterns in data.
The financial account consists of direct investment, portfolio investment, financial derivatives, other investment, and reserve assets. Sweden can acquire and dispose of financial assets abroad. All transactions during the quarter concerning external assets show Sweden’s change in net external assets. Sweden can also borrow and repay financial external liabilities. All transactions during the quarter concerning external liabilities show Sweden’s change in net external liabilities. The difference between Sweden’s change in net external assets and Sweden’s change in net external liabilities can be positive or negative, and shows net lending and net borrowing, respectively.
The capital account records Sweden’s capital transfers and transfers of non-financial assets with regard to the rest of the world. Compared with other parts of the balance of payments, amounts in the capital account are usually small.
The difference between Sweden’s financial external assets and liabilities position is the net of Sweden’s international investment position, which can be positive or negative.
An increase or decrease in assets describes Sweden’s external assets. An increase or decrease in liabilities describes Sweden’s external liabilities.
Merchanting, which forms a part of the trade in goods, refers to triangular trade in which goods are purchased and sold abroad without the good crossing a Swedish border.
Statistical Database
More information is available in the Statistical Database
Feel free to use the facts from this statistical news but remember to state Source: Statistics Sweden.