On the year 2013, the Dutch current-account increased to almost EUR 63 billion, which is more than 10% of the Dutch Gross Domestic Product (GDP). The surplus was higher than in 2012, when the surplus amounted to 9.5% of GDP. In the fourth quarter of 2013, the current-account balance amounted to EUR 14 billion, about EUR 2 billion less than a year before. Offsetting higher surpluses in the goods and, especially, services account were a lower income surplus and higher net current transfers. The Netherlands’ net external assets rose to EUR 525 billion at year-end 2013.
In both the goods (EUR 12 billion surplus) and the services trade (EUR 5 billion surplus), the Netherlands realised a higher profit on the rest of the world than the previous year. On services, the profit was due to exports, which increased by 7% year-on-year, mainly through the contribution of other business services – including business consultancy and intragroup services – which recorded 8% higher exports. Other business services constitutes the largest services sector, accounting for 35% of services exports in the fourth quarter. The exports rise was also driven by transport, travel and ICT services. As regards goods, the surplus was barely higher than in 2012Q4, due to lower export (-1%) and import (-2%) values, stemming from lower import and export prices.
The income and current transfer balances (EUR 2 billion and EUR -5 billion, respectively) were both lower than in 2012Q4. On the income side, this was due to a 14% (or EUR 3 billion) drop in inward incomes, partly attributable to the lower profits on the fourth quarter of 2013 reported by Royal Dutch Shell. Current transfers were characterised by high one-off outward payments in connection with the LIBOR settlement made in late October between Rabobank, the UK supervisor and US authorities and totalling about EUR 700 million.
For 2013 as a whole, the goods and the services balances each ended up EUR 6 billion higher than in 2012 – the goods increase being driven by lower imports, whereas the services sector realised almost 10% higher exports. Conversely, Dutch residents earned over EUR 5 billion less net inward income in 2013, whereas net outward current transfers rose by EUR 2 billion.
Breakdown of current-account balance (%gdp)
Dutch enterprises made net cross-border investments worth EUR 9 billion in the fourth quarter of 2013, while foreign-based parent companies of mainly non-financial corporations invested EUR 5 billion’s worth in the Netherlands. Both capital flows are partly accounted for by corporate restructuring projects. Dutch general government and Dutch banks effected substantial redemptions on money market paper. Despite net sales of EUR 4 billion in foreign securities, strong price gains on foreign equities made for a net increase of foreign asset holdings. Holdings of Dutch securities by non-residents rose likewise (by EUR 3 billion), despite Dutch redemptions of money market paper, on account of equity price gains.
Across 2013, the current-account surplus contributed to a rise in the overall net external assets of the Netherlands by EUR 125 billion to EUR 525 billion. At year-end 2013, Dutch residents held EUR 3.505 billion’s worth of assets abroad, while non-residents held EUR 2.980 billion’s worth of assets in the Netherlands. As regards securities (equities and debt certificates), the Netherlands holds net liabilities to the rest of the world. This is because opposite the sizeable portfolio investments of pension funds and insurers there are even larger investments by non-residents in stocks of Dutch-based listed companies, Dutch government bonds and debt securities issued by Dutch banks. The balance has been growing smaller over the past few years.
Net external assets of the Netherlands (EUR millions)