The Bank of Finland has released its annual review of Finland’s balance of payments.
 
The review covers the current account, direct investment, portfolio investment, and the external assets and liabilities of monetary financial institutions. The review includes a box describing the progress in identifying the causes behind balance of payment errors and omissions. In addition to year 2010 data, the review also analyses developments in current accounts and portfolio investment in the first half of 2011.
 
The current account deficit increased to almost EUR 1.7 bn in the first half of 2011, which was EUR 1.2 bn more than a year earlier. The deficit increase was due mainly to a weak trade balance in the first half of the year, but the services and income deficits also increased compared with the year-earlier period. The weakening of the trade balance was partly attributable to higher energy prices, which have raised the value of imports more than that of exports.
 
In 2010, direct investment outflows and inflows were both substantially higher than in the previous year. Foreign investors’ channeling of investments abroad via Finnish investment enterprises contributed to an exceptional enlargement of investment flows. The portion of capital passing through Finland has increased in the 2000s.
 
Capital outflows and inflows of portfolio investment were still brisk in 2010, but contracted slightly from the previous year. Portfolio investment was abundantly outward on net. Capital flows have largely followed the same pattern since the latter part of 2009, and current developments generally correspond also to the situation prevailing in the 2000s, prior to the global financial crisis. In January-June 2011, a fall in Finnish share prices notably lowered the market value of inward portfolio investment.
 
The entire annual review in Finnish can be found at:
http://www.suomenpankki.fi/link/9ef22a65390b46169b9e64141267100c.aspx?epslanguage=fi
 
The annual balance of payments review will be published in Swedish and English on 31 October 2011.
For more information, please contact Anne Turkkila, Economist, tel. +358 10 831 2175.
;