Up to October 2020 the combined current and capital account balance showed a deficit of €90 million, compared with the surplus of €1621 million in the same period in 2019 (Chart 1).
The observed deficit up to October was due to the deficit of goods and primary income accounts, partially offset by the surpluses of services, secondary income and capital accounts (Chart 2).
Up to October the exports of goods and services reduced by 22.0% (10.9% in goods and 40.0% in services) and the imports decreased by 17.4% (15.6% in goods and 24.9% in services). In this period, the goods account deficit decreased by €4545 million when compared to the same period of 2019, reaching €9622 million. Nevertheless, the services account surplus diminished by €8415 million, to €7036 million. Such reduction was justified mainly by the significant decrease on the travel balance, by €7244 million.
In October, the exports and imports of goods and services showed reductions comparing to the same period of 2019, by 15.1% (reductions by 2.6% in goods and 37.3% in services) and 14.6% (reductions by 11.6% in goods and 27.6% in services) respectively. It stood out the reduction of the travel balance by €721 million, as a consequence of the decrease of 55.8% in exports and 38.2% in imports (Chart 3).
Between January and October of 2020, the primary income deficit decreased by €1971 million, when compared with the previous year, reaching €2500 million. This decrease of the deficit was mainly caused by the decline in investment income payments to non-resident entities. The secondary income surplus decreased by €79 million, as a result of the evolution of the current transfers. On the other hand, the capital account balance increased €266 million, when compared to the same period of the previous year, mainly due to an increase of the EU funds received.
Up to October 2020, the financial account balance saw a €421 million increase in net foreign assets in Portugal (Chart 4). This was mainly due to a decrease in liabilities, through deposits held by non residents in portuguese banks, and by an increase in assets, as a result of the investment in debt securities issued by member states of the Monetary Union made by the banks and the insurance corporations and pension funds. In contrast, it was observed an increase in liabilities of Banco de Portugal vis-à-vis the Eurosystem and an investment of non-residents in Portuguese public debt securities.
Next update: 20 Jan. 2021