Balance of payments 2017: current account up 2%


Both net exports of financial services (+5.8%) and non-financial services (+4.6%) were up in 2017.Photo: Hans Splinter/Flickr 

On 5 April 2018, the Luxembourg central bank (BCL) and Statec released Luxembourg’s balance of payment figures for 2017 (pdf).

It was announced that the current account showed a surplus of €2.8 billion in 2017, an increase of about 2% compared to 2016.

The negative balance (deficit) of transactions in goods increased to €4.2 billion in 2017 (+6.6%), which was partly explained by the increase of imports of energy products and capital goods (launch of 2 satellites in March and May 2017, no launch in 2016).

The balance of international trade in services amounted to €23.2 billion and increased by nearly 5% compared to 2016. Both net exports of financial services (+5.8%) and non-financial services (+4.6%) were up in 2017.

The good performance of trade in financial services (more than 7% growth for exports and imports) is mainly due to that of the investment fund industry, whose average net assets under management have increased by almost 13% in 2017. The improvement in the services trade balance has thus offset the increase of primary income deficit (which is composed of employee compensation and investment income).

In the financial account, direct investment flows were dominated by a few disinvestment transactions that offset each other. The portfolio investments flows including the financial derivatives recorded net inflows of €36 billion during the year 2017. These net inflows were fully offset by outflows in the other investments (loans and traditional deposits). As a result, financial transactions globally recorded net capital outflows of €2.5 billion in 2017.