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Coronavirus squeezes trade surplus


The surplus on the current account of the Dutch balance of payments fell by 7% (year-on-year) to EUR 12.6 billion at the end of the second quarter of 2020, the lowest it has been in four years. This corresponds to 6.6% of Dutch gross domestic product (GDP), see Figure 1. The trade surplus fell as a result of a decline in both the balance of goods and of services. The income balance improved year-on-year, but underlying this, virtually all sectors saw a sharp drop in inward (EUR -14.7 billion) and outward (EUR -17 billion) income abroad.

Published: 23 September 2020

Balance on goods lowest in 10 years

The balance on goods fell by 12% (y-o-y) to EUR 13.7 billion, the lowest level it has been since the second quarter of 2010. Exports of goods contacted by 15% to EUR 103 billion. Imports of goods underwent a similar contraction (-16%), amounting to EUR 89.7 billion. In both cases, the contraction was largest in the oil and gas production sector. This was largely due to price falls. Trade in means of transport was hit hardest on both the import and export sides as a result of the coronavirus crisis.

Source: DNB statistics

At De Nederlandsche Bank, we independently compile statistics on the Dutch financial sector and economy. This article is based on these statistics. More information on our statistics and all dashboards can be found on our Statistics homepage.

The balance of services contracted by 8% to EUR 4.4 billion. Within the services sector, tourism was hit particularly hard on both the import and export side due to the impact of the coronavirus. Transport and storage services were hit harder on the export side than on the import side.

Cross-border income flows (in particular corporate profits, dividends and foreign interest received and paid ) saw sharp declines in gross flows. Almost all companies saw their foreign profits fall, but some sectors were hit harder than others. For example, oil and gas companies were hit hard, as was the aviation sector. Nonetheless, there were also companies that saw their foreign profits increase, such as supermarket chains.

The lower income of companies was also reflected in lower distributions of dividends to shareholders. Dutch investors, such as pension funds and investment institutions, saw foreign dividend payments plummet by over 60% to EUR 5.2 billion. Dividend payments from Dutch companies to foreign shareholders fell less sharply, by 26% to EUR 3.9 billion.

The lower gross income flows resulted in a less negative balance (EUR -3.2 billion) than in the prior year (EUR -5.7 billion), when Dutch companies distributed relatively large profits to their foreign parent companies. Due to the seasonal pattern of dividend payments in the second quarter of the year, the primary income balance is almost always negative.

Reduced response rates and poor quality of responses in part of the population, possibly due to coronavirus, mean that adjustments in income figures may be larger than usual. Fewer responses and poor response quality is particularly relevant for part of the survey population asked to complete questionnaires from Statistics Netherlands and DNB as of the first quarter of 2020. Certain reporting entities were permitted to defer submitting data. Imputations were used for missing data.

More information

  • Table 12.1 Balance of payments (quarterly)

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