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Published: 11 July 2014

Positive capital inflow to Finland in the early part of 2014, current account still in deficit

The financial account was characterised by net capital inflow during the early part of the year, which means foreigners’ investments in Finland exceeded Finnish residents’ investments abroad. The current account remained in deficit during the early part of the year (January to May).

The balance of payments and international investment position statistics has started using the new balance of payments and international investment position manual (BPM6) and new time series have been backcasted starting from the year 2006. The main changes made to the time series are explained in the review.

Current account

The current account was EUR 2.0 billion in deficit during the first quarter of the year. Thus, the deficit had grown from one year ago when it was EUR 1.4 billion. The deficit grew in nearly all sub-items of the current account: in the goods and service account and in the secondary income. In May, the current account was EUR 0.2 billion in deficit while the trade account in balance of payment terms was EUR 0.4 billion in surplus. The 12-month moving sum of the current account was EUR 4.7 billion in deficit.

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

Financial account and international investment position

Net capital inflow to Finland amounted to EUR 15.4 billion in the early part of 2014 (January to May). A majority of the capital inflow is explained by mergers and acquisitions of direct investments. Direct investment liabilities to the rest of the world have increased by EUR 11.3 billion while assets from the rest of the world have also increased by EUR 0.2 billion. Part of the net capital inflow is explained by portfolio investments: EUR 12.2 billion in capital flowed to Finland as portfolio investment liabilities, while EUR 8.2 billion was invested as assets to the rest of the world. Bonds issued by monetary and financial institutions and the central government attracted foreign investments by EUR 6.5 billion and EUR 5.6 billion respectively. Value changes in securities have increased both portfolio investment assets by EUR 5.9 billion and liabilities by 3.8 billion during the period.

In May 2014, net capital inflow to Finland was EUR 1.1 billion. Foreign direct investment assets increased by EUR 0.5 billion, while Finland's liabilities to the rest of the world contracted by EUR 0.3 billion. Inward portfolio investment to Finland was EUR 2.9 billion and the same amount was invested from Finland to the rest of the world. Other investments, i.e. loans, deposits and trade credits were EUR 2.4 billion inward.

The net international investment position has decreased by EUR 10.6 billion in the early part of 2014 (January to May). At the end of May 2014, the net investment position amounted to EUR 10.4 billion while at the beginning of January 2014 it was EUR 21.0 billion. The contraction in the net investment position is caused by the fact that Finnish foreign assets grew less than foreign liabilities. Assets grew by EUR 29.6 billion while liabilities increased by EUR 40.2 billion. Assets grew mainly as a result of increased portfolio investments and liabilities because of increased portfolio and direct investments. At the end of May 2014, Finnish residents’ foreign assets totalled EUR 680.1 billion, and foreign liabilities totalled EUR 669.6 billion.

The balance of payments data for 2013 will next be revised on 15 September 2014. The data for June 2014 will be published on 15 August 2014.

Finland’s international investment position

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

Inquiries: Mira Malhotra 029 551 3411, Pauliina Turunen 029 551 2958, balanceofpayments@stat.fi.

Director in charge: Leena Storgårds

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Reviews

• 1. Changes to the Balance of Payments Statistics Caused by the Introduction of the New International Statistical Standards (11.7.2014)

Tables

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Appendix tables

• Appendix table 1. Finland's balance of payments, monthly 2014, EUR million (11.7.2014)
• Appendix table 2. Finland's current account, monthly 2014, EUR million (11.7.2014)
• Appendix table 3. External assets and liabilities, by investment type, monthly 2014, EUR million (11.7.2014)
• Appendix table 4. Finland's balance of payments 2014, EUR million (11.7.2014)

Figures

• Appendix figure 1. Finlands current account and trade account (11.7.2014)

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Updated 11.7.2014