Current, negative capital balances €482M until February

The combined current and capital account balance in Portugal was -€482 million in the first two months of 2020, compared with -€502 million in the same period of 2019, Portugal’s central bank (BdP) said on Tuesday.

BdP said in a press release that the balance of goods and primary income contributed to this balance, the balances of which were only partially offset by the balance of services, secondary income, and capital accounts.

The goods account deficit increased by €27 million compared with the same period of the previous year and the services account surplus decreased by €12 million.

Up to February, exports of goods and services grew 2.9% (2.9% in goods and 2.8% in services) and imports increased 3.0% (2.5% in goods and 5.2% in services), it added.

The primary income deficit, in turn, rose €129 million over the same period to -€368 million.

“This increase was largely justified by the increase in investment income paid to non-resident entities”, BdP said.

In turn, the surplus in the secondary income account rose by €176 million, as a result of the increase in transfers received from abroad and the reduction in the financial contribution paid by Portugal compared with the same period of the previous year.

Up to February, the financial account balance recorded a decrease in Portugal’s net assets vis-à-vis abroad of %508 million.

“This decrease – the BdP said – resulted from the increase in liabilities, stress being laid on investment by non-residents in Portuguese public debt securities.”

In the opposite direction, banks increased their claims on non-resident entities, mainly through investment in debt securities, and Bank of Portugal reduced its liabilities to the Eurosystem.