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Balance of payments, 3rd quarter 2022

Increase in imports of goods and services continued to decrease Sweden’s current account balance

Statistical news from Statistics Sweden 2022-12-05 8.00

The current account surplus amounted to SEK 31.7 billion during the third quarter of 2022. It is a decrease of SEK 44.9 billion compared with the corresponding quarter a year ago. The biggest changes are in balance of trade and in balance of services, which decreased by SEK 21.6 billion and 20.5 billion, respectively.

A correction has been made on the 17th of January 2023. The correction refers to an increase in Swedish holdings in foreign equity and investment fund shares as well as debt securities regarding the third quarter of 2022.

“Imports of both goods and services were still increasing more than exports this quarter, which is the main reason why the current account surplus continued to decrease” says Hanna Wikberg, economist at the Balance of Payments unit.

Sweden’s net external assets position amounted to SEK 2 296.8 billion at the end of third quarter of 2022. The financial account shows that net borrowing with the rest of the world amounted to SEK 0.7 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 third quarter of 2022, Sweden’s current account as a share of GDP decreased to 4.0 percent of Sweden’s GDP, calculated as a moving average over the last four quarters.

Current account

diagram

Comparisons between periods in the current account are made using the corresponding quarter the previous year.

Imports of goods and services increased more than exports

Trade in goods showed a surplus of SEK 21.1 billion in the third quarter of 2022. This is a decrease of SEK 21.6 billion compared with third quarter of 2021. Exports of goods amounted to SEK 521.3 billion, which is an increase of SEK 96.7 billion compared with the corresponding quarter a year ago. Imports of goods amounted to SEK 500.2 billion, up by SEK 118.3 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 third quarter of 2021. The surplus thus amounted to SEK 40.5 billion in the third quarter of 2022.

Trade in services noted a deficit of SEK 22.8 billion. This can be compared with a deficit of SEK 2.3 billion in the corresponding quarter last year. Imports of services amounted to SEK 237.5 billion, up by SEK 62.0 billion compared with the third quarter of 2021. At the same time, exports of services noted an increase of SEK 41.4 billion in a corresponding comparison and amounted to SEK 214.7 billion.

Primary income surplus widened

Primary income, which consists mainly of compensation of employees and investment income, presented a surplus of SEK 59.4 billion in the third quarter of 2022. This surplus widened by SEK 2.9 billion compared with the corresponding quarter a year ago. Investment income is the main part of primary income that contributed to this change through an increased surplus. The surplus in investment income went from SEK 57.2 billion in the third quarter of 2021 to SEK 60.5 billion in the third quarter of 2022.

Portfolio investment contributed a surplus of SEK 19.8 billion to investment income, an increase of SEK 1.1 billion compared with the corresponding quarter a year ago. Investment income on direct investment contributed a surplus of SEK 42.9 billion, which is an increase of SEK 2.5 billion in a corresponding comparison.

Secondary income deficit widened

Secondary income, which includes international cooperation and donations and contributions to the EU, presented a deficit of SEK 26.0 billion. This deficit increased by SEK 5.7 billion compared with the corresponding quarter a year ago.

Net borrowing in the financial account

The financial account presented net borrowing amounting to SEK 0.7 billion in the third quarter of 2022. Net lending and net borrowing refer to the overall balance on the financial account.

During the third quarter direct investment, financial derivates and reserve assets showed net lending. Portfolio investment and other investment showed net borrowing during the same period.

Financial account

diagram

Direct investment increased both in Sweden and abroad

Net lending in direct investment amounted to SEK 58.3 billion during the quarter. Foreign direct investment in Sweden increased by SEK 39.3 billion and Swedish direct investment abroad increased by SEK 97.5 billion.

Portfolio investment decreased in Sweden and abroad

Net borrowing in portfolio investment amounted to SEK 14.1 billion during the quarter. Foreign investors decreased their portfolio investment in Sweden by SEK 70.2 billion, and Swedish investors decreased their portfolio investment abroad by SEK 84.3 billion.

Other investment increased in Sweden and abroad

Net borrowing in other investment corresponded to SEK 89.8 billion. Swedish other investment abroad decreased by SEK 118.9 billion, and foreign other investment in Sweden decreased by SEK 208.7 billion.

Financial derivatives and reserve assets

Net lending in financial derivatives and reserve assets amounted to SEK 4.1 billion and SEK 40.9 billion, respectively.

Continued increase of Swedish net assets abroad

Sweden’s net external assets position amounted to SEK 2 296.8 billion, which is an increase compared with SEK 2 117.1 billion in the previous quarter.

Similar to the second quarter of 2022, exchange rate changes have a noticeable impact on Sweden’s net external assets position during the third quarter. Above all, the value of Swedes’ assets abroad increased due to the depreciation of the Swedish krona. It contributes to an increase in the net assets abroad, as the external assets in foreign currency are greater than the external liabilities in foreign currency.

International Investment Position (IIP)

diagram

Swedish external assets and liabilities increased

During the third quarter, Swedish external assets amounted to SEK 19 568.5 billion, an increase of SEK 836.5 billion compared with the previous quarter. Swedish external liabilities increased by SEK 657.0 billion compared with the previous quarter and amounted to SEK 17 271.8 billion.

Direct investment, financial derivatives and other investment increased both in Sweden and abroad. Reserve assets increased abroad. Portfolio investment decreased both in Sweden and abroad. The largest net external assets were in reserve assets, direct investment and other investment.

Revisions

The Balance of Payments adheres to a predetermined revision policy, see Section 2.3 in the 2022 Quality Declaration.

Kvalitetsdeklaration, Betalningsbalans och utlandsställning, 2022 (scb.se).

The time series for the Balance of Payments and the International Investment Position has been revised from Q1 2015. The revision period has been extended due to the implementation of new sources of compensation of employees to and from abroad, as well as the results from the annual direct investment survey.

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 third quarter of 2022 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.

Statistical agency

The Riksbank

Producer

Statistics Sweden

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