Current account deficit hit €1,678m in June, Central Bank announced

The Bank of Portugal (BdP) published this Tuesday statistics that allow us to analyse the balance of payments progress during the first semester of the year. 

In the first six months of the year, combined current and capital account balance stood at €1,678 million in June, compared with -€836 million in the same period in 2017, which was mostly due to the goods and primary income accounts.

Until June, exports of goods and services had increased by 7% (6,8% in goods and 7,4% in services), while imports had increased by around 8,1% (8,9% in goods and 4,5% in services). There was an increase in the primary account deficit, which has risen to €3,611 million, and according to the BdP this increase was motivated by “the combined effect of a reduction in dividends received and an increase in dividends paid abroad”.

Foreign assets were also hit — during the first half of 2018 — as the financial account balance witnessed a decrease in net foreign assets in Portugal of €1,334 million.

Liabilities of non-financial corporations

With more detail, the statistics released showed that there was “an increase in liabilities of non-financial corporations, as a result of investment in equity securities by non-residents”, meaning foreigners are investing in shares that represent the ownership of a firm.