Press release number 23
30 Sep 2009

Finland’s Balance of Payments – Annual Review 2008 and first half of 2009

The Bank of Finland has released its annual review of Finland’s balance of payments.

Topics covered by the review are the current account, direct investment, portfolio investment and mone-tary financial institutions’ foreign assets and liabilities. The review also includes a charts section and a supplementary annex of tables (Excel). In addition to year 2008 data, the review also analyses develop-ments in the first half of 2009.

The direct investment section presents the results of the 2008 annual survey. Direct investment flows di-verged markedly from previous years’ average flows. Even though in recent years direct investment flows in Finland have been characterised by considerable annual fluctuations, the figures for 2008 are also marked by the exceptional global developments. The direct investment section also describes the new statistical method for investment between fellow enterprises, to be implemented in future. The new approach will decrease the direct investment stock and flow data. The revision is based on the growing importance of fellow enterprises’ items in connection with international groups’ increased internal fi-nancing arrangements.

As of the beginning of 2009, the compilation of the balance of payments portfolio investment statistics is based on a new data collection in which security investors and issuers report data on their holdings and issues on a security-by-security basis. This data enables a more precise analysis of Finnish and foreign investors’ security portfolios. A review of Finnish households’ foreign security portfolios reveals that small investors prefer share market risk and commonly-known issuers. As for non-financial corporations’ foreign financing, the share of bank loans as a supplement to portfolio liabilities has risen considerably in the past few years owing to increased difficulties in obtaining financing in the international capital mar-kets. There was a turn in non-financial corporations’ financing decisions in the first half of 2009, as the stock of foreign bank loans began to fall again, and in January-June 2009 non-financial corporations re-paid their foreign bank debt by over EUR 600 million.

The entire annual review can be found at:

The annual balance of payments review will be published in Swedish and English on 26 October 2009.

For more information, please contact: Jaakko Suni, Economist, tel. +358 10 831 2454 and Anne Turkkila, Economist, tel. +358 10 831 2175