DNB is responsible for compiling the Dutch balance of payments, in close cooperation with Statistics Netherlands (CBS). The balance of payments provides an overview of the transactions between the Netherlands and other countries in a given period, and thus an impression of how our economy is doing. The balance of payments has three components: the current account, the capital account and the financial account.
This dashboard presents the development of the balance on these accounts. Balance of payments figures are prepared in accordance with the sixth edition of the IMF's balance of payments and International Investment Position Manual (BPM6).
The balance of payments provides an overview of the transactions between the Netherlands and other countries in a given period. These transactions between Dutch residents and non-residents are divided over three accounts: the current account, the capital account and the financial account, as explained below.
The current account includes international trade in goods and services, as well as primary and secondary income transactions. 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 current account balance is the difference between income from abroad and expenditure abroad in the current account. The Netherlands has had a positive current account balance, also known as a surplus, for decades. This is mainly due to the structural export surplus of goods and services. There is much international attention on the Dutch current account surplus as it is consistently above the 6% norm set by the European Commission as part of the Macroeconomic Imbalance Procedure (MIP). The MIP aims to identify potential macroeconomic imbalances in the euro area that could adversely affect the EU economy or the euro.
The capital account includes transactions in non-produced, non-financial assets, in addition to capital transfers. Capital transfers include gifts of capital goods, debt cancellation, inheritances and legacies. Non-produced non-financial assets include, for example, brand rights and football transfers.
The spike in the capital account balance in the second quarter of 2022 is largely due to the sale of intellectual property by a Dutch business unit of a foreign multinational to a foreign unit of the same multinational. Never before has the capital account balance in the Netherlands or indeed in the entire euro area approached this amount.
The financial account lists transactions in financial assets and liabilities, e.g. shares, deposits and real estate. The financial account is divided into five sections:
In his introductory remarks at the Fifth Macroprudential Policy and Research Conference at the ECB in Frankfurt Klaas Knot discussed some of the challenges in using macro-prudential tools.
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The Dutch financial sector must be prepared to face increasing interest rate and credit risks at financial institutions. In addition, lower liquidity in financial markets may cause price fluctuations in one market to spill over to other parts of the financial system more quickly.
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“Risks to financial stability increase due to rapidly rising interest rates. Rising interest rates have made it more expensive for households and businesses in the Netherlands to borrow money.” Klaas Knot said this today at the presentation of DNB’s autumn 2023 Financial Stability Report.
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At the Flairs conference Klaas Knot spoke for an audience of young bankers about the experiences with bank failures since the global financial crisis, the importance of a well functioning and credible resolution regime, and the lessons we can draw from recent cases.
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