Dutch current account surplus continues to grow in 2012

Statistical News Release
Date 18 June 2012

As the figures that De Nederlandsche Bank published on its website today show, the surplus on the current account of the Dutch balance of payments came to EUR 19 billion (13 per cent of GDP) in the first quarter of 2012. This represents an unprecedented high balance of current account receipts and expenditure. The 2012 first-quarter surplus is EUR 6 billion above that recorded in the first quarter of last year.

At the start of the financial crisis, the Dutch current account surplus fell rapidly to EUR 3 billion in the fourth quarter of 2008. Since then the balance has shown a trend-based rise (see chart below). Over the past four quarters, the surplus amounted to EUR 57 billion, 9.5 per cent of GDP. The European Commission has set a three-year average of 6 per cent as the upper limit as an indicator for possibly starting what is called an Excessive Imbalances Procedure; the average for the Netherlands over 2009 through 2011 amounted to 6.5 per cent. The current account balance is one of the ten indicators that the Commission takes into account for this, as well as their interdependence. 

Dutch current account balance

The sharp rise in the surplus seen in the past quarters may in part be related to lagging domestic expenditure. The value of goods exports rose 9 per cent year-on-year, while the value of imports increased 7 per cent. Price effects also play a significant role in these gains. The higher current account balance is also attributable to a rising income account surplus, which particularly reflects the relatively positive trend of earnings achieved abroad by Dutch multinational companies, such as Royal Dutch Shell.
 
The financial account of the Dutch balance of payments shows that contrary to previous quarters, investors made substantial cross-border securities investments in the first quarter. The quarter was characterised by increasing confidence among investors, which was also reflected in rising share prices. On balance, foreign investors bought Dutch securities to an amount of EUR 21 billion, having sold almost double that amount in the last two quarters of 2011. Especially money market and capital market paper issued by banks found its way to foreign investors during the first quarter. Dutch investors on their part bought foreign securities to an amount of EUR 18 billion (the highest level of net purchases seen over twelve quarters), having sold EUR 11 billion of foreign paper in the two preceding quarters. Foreign shares and debt paper were equally popular. 
 
As in previous quarters, Dutch investors were particularly keen on German bonds: 50 per cent (EUR 4.5 billion) of total net purchases of foreign debt paper came from Germany (see table below). The value of German bonds held by Dutch investors thereby came to EUR 159 billion, which accounted for over 25 per cent of the total foreign portfolio in the hands of Dutch investors. Exposure to German bonds has grown 27 per cent since end 2010, mainly due to transactions. At the end of 2010, exposure to France was still about equally high as that to Germany, but it shrank significantly in the course of 2011. The diminishing exposure to Italy, Spain, Greece and Portugal continued in the first quarter of 2012. Over the past five quarters, Dutch investors bought relatively large quantities of Austrian and particularly Finnish debt paper.

Country of issuerPosition at end-March 2012
(EUR billion)
First-quarter 2012 net purchases (EUR billion)Changes since end 2010
Germany158,84,527%
France105,81,7-11%
United States74,7-0,7-9%
Unted Kingdom34,60,85%
Italy33,4-2,0-27%
Spain31,0-1,7-7%
Austria23,7-0,132%
Finland12,61,5115%
Greece3,4-1,5-47%
Portugal1,8-0,3-55%