The financial crisis has considerably affected foreign investors’ direct investment in Finland. Since 2008 investment inflows have been substantially lower than in the previous years. In general, investment flows into Finland have followed global patterns in the 2000s. After the crisis investment flows contracted globally, but in the past few years they have already recovered slightly. This information is presented in the annual balance of payments review published today by the Bank of Finland http://www.suomenpankki.fi/link/9ef22a65390b46169b9e64141267100c.aspx?epslanguage=fi.
However, despite the crisis, Finnish investors have continued to expand business activities abroad. Consequently, annual investment outflows have been higher than in the pre-crisis years.
Debt funding has become increasingly important in all foreign finance to enterprises. The importance of intra-group items, in particular, has increased.
All in all, in net terms, Finnish enterprises imported debt capital amounting to nearly EUR 7 bn and equity capital amounting to almost EUR 2 bn in the first half of 2012. Capital flows were inward on net due to foreign purchases of Finnish-enterprise shares and debt securities as well as an increase in intra-group debt capital items. In 2011 capital flows were outward on net, with debt capital decreasing by EUR 3 bn and equity capital by EUR 2 bn.
The annual balance of payments review also covers foreign sales of bonds issued by the Finnish government and MFIs and the structure of the current account deficit. Furthermore, the review includes a box on challenges related to balance of payment net errors and omissions.
The annual balance of payments review will be published in English on 26 October 2012.
For more information, please contact: Anne Turkkila, Economist, tel. +358 10 831 2175