A higher export surplus strengthens the current account balance

Rising interest income from pension funds boosts primary income balances

The basic income balance, which includes wages, dividends and cross-border interest, was negative €2.5 billion in the second quarter. Traditionally, dividends to foreign shareholders have pushed down the balance. Compared to the previous year, there was an improvement in the balance of EUR 4.0 billion as a result of a stronger increase in interest income compared to interest payments.

Due to higher interest rates, pension funds in particular (+€2.6 billion) received higher interest income from abroad in the second quarter. For pension funds, this resulted in a balance of interest outflows of €7.5 billion (+€2.6 billion year-on-year). They particularly benefited from increased interest rates on foreign bonds and higher interest rates on so-called margin accounts abroad. These margin accounts serve as insurance for interest rate derivative contracts entered into by pension funds against interest rate risks.

In other sectors, rising interest income and increasing interest payments with foreign countries averaged each other out.

The secondary income balance, which includes development aid and personal remittances, fell by €700 million to a negative amount of €1.4 billion. Overall, this component has a modest impact on the total current account balance in the Netherlands.

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Table 12.1: Balance of Payments from 2015
Table 12.5: Initial income calculation