23 December 2022
The Dutch current account balance of €13.9 billion (6% of GDP based on three-year averages) in the third quarter of 2022 was €0.3 billion lower than a year earlier, according to figures from DNB. The Dutch export surplus is once again the determining factor for the current account balance, with underlying values of both imports and exports continuing to rise.
The current account of the Dutch balance of payments includes international trade in goods and services, as well as primary and secondary income transactions. For the past few decades, the Netherlands has had a positive current account balance, also referred to as a surplus, which means that income has exceeded expenditure.
Export surplus remains high, value of imports and exports up sharply
The current account surplus is mainly due to a €19.3 billion export surplus. Underlying this surplus, the value of imports and exports rose for the sixth quarter in a row. Exports grew to €223 billion (up 23% from a year earlier) and the value of imports to €204 billion (up 26%).
These increases were partly caused by rising prices (including for energy) as well as the recovery of the economy following the COVID-19 crisis. The value of exports increased less than the value of imports in absolute amounts over the past year, resulting in an export surplus decrease of €0.2 billion to €19.3 billion.
Primary and secondary income balance back to last year's level
The balance on primary and secondary income totalled -€5.5 billion, which is €0.1 billion lower than a year ago. Primary income transactions include wages, interest and dividends. Examples of secondary income transactions are pension benefits and insurance payments, development aid and personal funds transfers. The negative balance means that, in terms of primary and secondary incomes, more money leaves the Netherlands than comes in.
The primary income balance was more solidly in the red in the second quarter than in the third quarter. This was partly due to many dividend payouts from Dutch companies in the second quarter. These dividend payouts were a contributing factor in the sharply lower current account balance in the second quarter.
What do football and the balance of payments have to do with each other?
With the sale of Antony to Manchester United for €95 million, AFC Ajax received the highest ever transfer fee in the Dutch premier league. Since the balance of payments includes all transactions between the Netherlands and foreign countries, this transfer fee is also included in the balance of payments.
The balance of payments has three components: the current account, the capital account and the financial account. The capital account records purchases and sales of non-produced, non-financial assets, in addition to capital transfers. This includes trademark rights, for instance, but also football transfers. The income from transfers abroad is netted with the expenditure on new purchases from abroad; together, this results in the transfer balance. In the third quarter, the transfer balance was exceptionally high at close to €200 million. Thanks partly to the transfer of Antony to Man United, transfers with the UK make up a significant share of the transfer balance in the third quarter of 2022.