Income from foreign equity interests increased
The balance on the current account of the balance of payments amounted to EUR 21 billion in the third quarter of 2018, an increase of EUR 2.5 billion compared to the same period last year. The increase was driven by the higher profitability of foreign subsidiaries of Dutch multinationals, which raised income from foreign equity interests by 9% to EUR 45 billion. Profits realised by foreign companies on their participating interests in the Netherlands also rose, but at EUR 2 billion (6%) that increase was less pronounced.
The trade surplus on goods and services with the rest of the world has risen marginally, from EUR 18 billion a year ago to EUR 18.5 billion in the third quarter of 2018. Goods exports were almost 7% up on the back of an increase in the volume of exports of 2.5%. Imports rose even more, as the value of imports went up nearly 9% and their volume 3.5%. Both the import of natural gas and that of other energy products were considerably higher than a year ago. All in all, this resulted in a slight drop in the goods balance. The services balance was EUR 1.1 billion higher than a year before. In the third quarter of 2018 both exports and imports of services increased for all the underlying services categories (transport services, travel, other business services and other services).
Higher international investment position through returns on equity investments
Dutch investors in the third quarter of 2018 achieved good returns, in particular on their (listed) shares. The value of their foreign equity and investment fund shares increased EUR 22 billion (2.6%). The value of Dutch shares by contrast showed a slight decline (EUR -2 billion). Net sales of Dutch shares by foreign investors (EUR -19 billion) can largely be attributed to the transfer of a registered office of a Dutch listed entity. This transfer also entailed a decrease in shareholdings abroad, which even apart from this also declined over the third quarter. In addition, equity interests held by foreign parties in Dutch subsidiaries were wound down. Restructurings in the sector of special financial institutions played an important role in this respect.
Supplementary indicator for net international investment position at market value
In June 2018, DNB and Statistics Netherlands for the first time published consistent data for the Dutch net international investment position. Some direct investment positions are still included at book value in this international investment position. Companies whose liabilities side is listed (valued at market value) and whose assets side largely consists of non-stock market traded participating interests (valued at book value) are consequently mismatched in the net international investment position. The Netherlands has a relatively large number of such companies. In addition to the "traditional" net international investment position, DNB and Statistics Netherlands as of the third quarter of 2018 therefore also publish an indicator that makes an adjustment for this mismatch based on share price information: the net international investment position at market value. The Dutch net international investment position at market value at the end of the third quarter of 2018 amounted to EUR 690 billion, EUR 190 billion more than the "traditional" net international investment position as determined according to the official framework for the sector accounts (which in the third quarter of 2018 increased from EUR 451 billion to EUR 500 billion). In the future, the net international investment position at market value will be determined within this official framework, including information about the underlying geographical and sectoral breakdown.