Balance of payments, 3rd quarter 2019
Higher exports of goods and services contributed to stronger current account
Statistical news from Statistics Sweden 2019-12-04 9.30
The current account surplus amounted to SEK 68.8 billion in the third quarter 2019. This is an increase of SEK 30.9 billion compared with the third quarter 2018. Trade in goods is the main contributing factor to the higher surplus.
The financial account shows that net lending with the rest of the world amounted to SEK 77.4 billion during the quarter. Sweden’s total net external asset position, shown in the international investment position, amounted to SEK 1 226.5 billion at the end of the third quarter 2019.
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, and 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 statistics news.
Current account surplus as share of Sweden’s GDP increasing
Sweden’s current account as a share of the GDP has increased in recent quarters, and amounted to 4.0 percent of Sweden’s GDP in the third quarter of 2019, calculated as a moving average over the last four quarters. The current account as a share of the GDP last reached this level in the first quarter 2016.
Comparisons between periods in the current account are made using the corresponding quarter the previous year.
Balance on trade in goods surplus increasing
The trade in goods resulted in a surplus of SEK 33.8 billion, which is an increase of SEK 16.1 billion compared with the third quarter 2018. Goods exports amounted to SEK 393.5 billion, up by SEK 23.7 billion compared with the corresponding quarter a year ago. Goods imports also increased and amounted to SEK 359.7 billion, up by SEK 7.6 billion in a corresponding comparison. Surplus from merchanting, which forms a part of the trade in goods, increased by SEK 0.9 billion compared with the third quarter 2018, and amounted to SEK 22.4 billion.
Balance on trade in services went from deficit to surplus
The services account resulted in a surplus of SEK 7.3 billion. This can be compared with the deficit of SEK 1 billion in the corresponding quarter a year ago. Services exports amounted to SEK 184.5 billion, up by SEK 23.4 billion compared with the third quarter 2018. At the same time, services imports increased by SEK 15.2 billion in a corresponding comparison, and amounted to SEK 177.2 billion.
Other business services, charges for the use of intellectual property and travel were the main types of services to contribute to increased exports. Telecommunications, computer and information services, other business services and travel were the types of services that contributed the most to increased imports.
Primary income surplus increasing
Primary income, which consists mainly of compensation of employees and investment income, presented a surplus of SEK 49 billion in the third quarter. This surplus rose by SEK 7.5 billion compared with the corresponding quarter a year ago. Investment income was the main contributor to the higher surplus in the primary income; from SEK 38.5 billion to SEK 45.7 billion in a corresponding comparison.
Portfolio investment contributed a surplus of SEK 24.6 billion to investment income, up by SEK 5.8 billion compared with the corresponding quarter a year ago. The higher surplus was due to increased dividends on equity and investment share funds and lower interest rates on Swedish debt securities. Investment income on direct investment contributed a surplus of SEK 21.1 billion, up by SEK 1.9 billion compared with the third quarter 2018.
Secondary income deficit increasing
Secondary income, which includes grants and donations and contributions to the EU, presented a deficit of SEK 21.3 billion. This deficit increased by SEK 0.9 billion compared with the corresponding quarter a year ago.
Net lending in the financial account
The financial account presented net lending amounting to SEK 77.4 billion in the third quarter 2019. Net lending and net borrowing refer to the overall balance on the financial account.
Portfolio investment, financial derivatives and other investment in the financial account present net lending during the quarter. At the same time, direct investment and reserve assets present net borrowing during the quarter.
Foreign direct investment in Sweden increasing
Net borrowing in direct investment amounted to SEK 12.7 billion during the quarter. Foreign direct investment in Sweden increased by SEK 43.7 billion, while Swedish direct investment abroad increased by SEK 31.1 billion.
Swedish portfolio investments abroad increasing
Net lending in portfolio investment amounted to SEK 10.0 billion during the quarter. Swedish investors increased their portfolio investment abroad by SEK 6.7 billion, while foreign investors decreased their portfolio investments in Sweden by SEK 3.3 billion.
Other investment abroad increasing
Net lending in other investment corresponded to SEK 108.1 billion. Swedish other investments abroad increased by SEK 214.5 billion, while foreign other investments in Sweden increased by SEK 106.3 billion.
Financial derivatives and reserve assets
Net lending in financial derivatives amounted to SEK 5.5 billion. Reserve assets shows decreased net lending corresponding to SEK 33.6 billion.
Net assets in Sweden’s international investment position increasing
Sweden’s net assets position with the rest of the world amounted to SEK 1 226.5 billion, an increase compared with the previous quarter, in which net assets amounted to SEK 847.8 billion. Portfolio investment contributed most to the increase of net assets, through decreased net liabilities.
Comparisons between periods in the international investment position are made using the previous quarter.
Swedish external liabilities increasing
Sweden’s external liabilities increased by SEK 349.6 billion compared with the previous quarter and amounted to SEK 13 496.3 billion. This change is largely due to an increase in Sweden’s external liabilities in other investment and financial derivatives.
Swedish external assets increasing
Swedish external assets increased by SEK 728.2 billion compared with the previous quarter and amounted to SEK 14 722.7 billion. Portfolio assets and other investment abroad contributed most to this increase.
Sweden’s largest net external assets are in direct investment
Direct investment, reserve assets and other investment account for the largest net external assets. The largest net liabilities are in long-term debt securities in portfolio investment.
Differences between the Balance of Payments and the National Accounts
There are differences between estimations within the Balance of Payments and the National Accounts. There is cooperation under way between the Balance of Payments and the National Accounts in a long-term project to coordinate these statistics.
Revisions
The revision period was extended beyond the normal time period due to the outcome of the yearly survey on direct investment. The time series for the Balance of Payments and the international investment position has been revised from Quarter 1 2015.
The Balance of Payments adheres to a predetermined revision policy, see section 2.3 in the Quality Declaration 2019. In a compilation of the balance of payments and the international investment position, data based on forecasts are used in some cases. The statistics will be updated as results are received. By way of exception, additional periods may be revised, if methodological changes have been made or if new data is added that significantly alter the balance of payments.
Revisions carried out in connection with publication of the third quarter 2019 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 with regard to the rest of the world. Only 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 of 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 nonfinancial 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.
Next publishing will be
2020-03-11
Statistical Database
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