Published: 20 March 2020

Current account in surplus in the fourth quarter, net international investment position strengthened

The current account was in surplus in the fourth quarter of 2019. In balance of payments terms, the value of goods exports grew by six per cent from the corresponding quarter of the year before. Service exports still grew strongly, but the service account turned again into deficit. The primary income account remained in surplus. The net international investment position strengthened. The data appear from Statistics Finland's statistics on balance of payments and international investment position.

Current account and goods and services account

Current account and goods and services account

Current account

In the fourth quarter of 2019, the current account was EUR 1.4 billion in surplus. The balance of goods and services showed a surplus of EUR 1.1 billion. Of the sub-items of the current account, the primary income account was EUR 1.0 billion in surplus and the secondary income account EUR 0.8 billion in deficit.

Goods and services

The trade account in balance of payments terms was EUR 1.5 billion in surplus in the fourth quarter of 2019. In the corresponding quarter of the previous year, the trade account was EUR 0.2 billion in deficit. The service account showed a deficit of EUR 0.4 billion in the fourth quarter of 2019.

Goods exports in balance of payments terms amounted to EUR 17.1 billion in the fourth quarter of 2019, which means that goods exports grew by six per cent from the corresponding quarter of 2018. Goods imports amounted to EUR 15.6 billion, so goods imports declined by five per cent from the fourth quarter in 2018. In the fourth quarter of 2019, service exports grew by 10 per cent and service imports by seven per cent compared to the corresponding quarter of the previous year. Service exports amounted to EUR 8.4 billion and service imports to EUR 8.8 billion.

More detailed import and export figures in balance of payments terms by service item and area can be found in the statistics on international trade in goods and services starting from 2015. Decreases and increases made to the Finnish Customs figures, which result in goods trade in balance of payments terms, are also broken down in the statistics on international trade in goods and services.

Primary income in the fourth quarter

A total of EUR 0.9 billion were paid in investment income on net to Finland in the last quarter of 2019, which is explained by investment income from direct investments and portfolio investment income. Primary data on investment income for the whole 2019 were EUR 1.0 billion in deficit, which is mainly due to growth in dividends from portfolio investments paid abroad from Finland. Data on investment income are preliminary and will become revised in connection with the following quarterly data.

The secondary income account was EUR 0.8 billion in deficit in the fourth quarter of 2019.

Finland’s current account and goods and services account, 12 –month moving sum

Finland’s current account and goods and services account, 12 –month moving sum

Financial account and net international investment position

Net international investment position strengthened from the previous quarter as a result of other investments

In the last quarter of 2019, Finland had EUR 804.5 billion in foreign assets on gross and EUR 800.4 billion in foreign liabilities on gross. The net international investment position, that is, the difference between the stock of assets and liabilities, was thus EUR 4.1 billion as there were more liabilities than assets. Both the stock of assets and liabilities went down, which was caused by the fall in investments and the stock of derivatives on both the asset and liability sides.

The net international investment position improved from the previous quarter when the net international investment position was EUR -3.8 billion. Financial transactions stood for EUR 1.6 billion and changes in prices and exchange rates and other changes in classifications for EUR 6.4 billion of the change in the net international investment position.

Net assets from other investments improved

Examined by type of investment, the most foreign assets were in the form of portfolio investments at the end of the last quarter of 2019. Portfolio investment assets amounted to EUR 344.2 billion, of which EUR 131.7 billion were in bonds and money market instruments and assets in equity and mutual fund shares amounted to EUR 212.5 billion. Assets from direct investments totalled EUR 163.8 billion and assets in the form of other investments amounted to EUR 225.4 billion. Assets from other investments fell from the previous quarter as cash assets decreased.

Foreign liabilities, totalling EUR 415.3 billion, were also most in the form of portfolio investments. Liabilities from direct investments were EUR 117.8 billion and liabilities from other investments EUR 205.9 billion. Other investment liabilities fell from the previous quarter.

In the last quarter of 2019, net assets improved from the previous quarter in other investments where net assets amounted to EUR 19.4 billion. The biggest net assets, EUR 46.0 billion, were in the form of direct investments in the last quarter of 2019. The biggest net liabilities, EUR -71.1 billion, were in portfolio investments. Net liabilities of portfolio investments are explained by net liabilities of EUR 135.2 billion in bonds and money market instruments. Assets in equity and mutual fund shares were EUR 64.1 billion larger than liabilities.

Finland’s net international investment position quarterly

Finland’s net international investment position quarterly

Net capital outflow from Finland

In the last quarter of 2019, net capital outflow amounted to EUR 1.6 billion. Net capital outflow in the form of other investments totalled EUR 4.6 billion and capital inflow most in the form of portfolio investments EUR 3.1 billion, when Finnish investors decreased their investments abroad and foreign investors increased their portfolio investments to Finland.

Social security funds had largest net assets

When the net investment position is examined by investor sector, most foreign net assets, EUR 157.7 billion, were held by social security funds, of which employment pension schemes are the most important ones. EUR 122.4 billion of social security funds’ net assets were in the form of equity and mutual fund shares and EUR 31.6 billion in the form of money market instruments and bonds. Net assets of social security funds improved from the previous quarter primarily as a result of price changes in assets of equity and mutual fund shares. Net assets were held most by monetary financial institutions, EUR 134.1 billion. The net investment position of monetary financial institutions improved from the third quarter of 2019 as a result of decreases in cash classified as other investments and net liabilities of deposits.


Source: Balance of payments and international investment position, Statistics Finland

Inquiries: Hanna Björklund 029 551 3296, Mira Malhotra 029 551 3262, balanceofpayments@stat.fi.

Director in charge: Jan Nokkala

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Tables

Tables in databases

Appendix tables


Updated 20.3.2020

Referencing instructions:

Official Statistics of Finland (OSF): Balance of payments and international investment position [e-publication].
ISSN=2342-348X. 4th quarter 2019. Helsinki: Statistics Finland [referred: 10.7.2020].
Access method: http://www.stat.fi/til/mata/2019/44/mata_2019_44_2020-03-20_tie_001_en.html