Fewer profits from abroad in beneficial interest rate environment
The primary income balance, which includes cross-border wages, dividends and interest, came in at a negative €8.5 billion in the second quarter, €5.2 billion lower than a year earlier. Some €3 billion reflect cross-border wages. For many years now, Dutch companies have consistently paid higher wages to foreign workers than foreign companies pay to Dutch households.
Profits made by foreign subsidiaries distributed to Dutch firms fell by €5.3 billion, whereas Dutch firms distributed €1.5 billion more in profits to foreign owners than in the same quarter last year.
The interest rate environment had a positive impact on the current account balance in the second quarter, with income increasing by €2.0 billion and payments decreasing by €1.2 billion compared to a year earlier.
Net external assets fell
The net external asset position is the balance of all receivables Dutch parties have with parties abroad, and the receivables foreign parties have with Dutch parties.
This net external asset position of the Netherlands was €469.4 billion in mid-2024, 4.7% lower than a quarter earlier. One of the reasons for the decline was stock market developments: rallying share prices caused an increase in foreign owners' claims on Dutch non-financial companies to the tune of €34.8 billion.
Similarly, there was a sharp decline of €37 billion in De Nederlandsche Bank's (DNB) claim on other central banks, also known as the TARGET2 balance. This has also depressed the net international investment position.
DNB's monetary gold is also part of external assets. The sharp rise in gold prices boosted its value by €2.6 billion, to €43.1 billion.