Summary

• The current and capital account balance stood at EUR 5.14bn in the third quarter of 2024, down from EUR 5.52bn in the same quarter of the year before.
• The financial account of the balance of payments recorded a positive balance of EUR 5.30bn (net capital outflow) in the third quarter of 2024, up from EUR 4.92bn in the same quarter of the year before.
• The net international investment position stood at EUR –18.7bn or –22.3% of GDP at the end of the third quarter of 2024. The negative balance shrank by EUR 5.82bn from the second quarter of 2024 (with the share in GDP standing at –30.0%).
• Gross external debt stood at EUR 63.0bn or 75.2% of GDP at the end of the third quarter of 2024.

The current and capital account of the balance of payments (Figure 1) ran a surplus of EUR 5.14bn in the third quarter of 2024, which is a decrease of EUR 377.3m from the same period of the preceding year. This was mostly due to the services sub-account, the positive balance of which decreased by EUR 390.9m from the same quarter of the year before, and the fall in the positive balance of the capital account by EUR 119.1m, mainly as a result of smaller distributions of EU funds in the form of capital transfers to end users. It should be noted that revenues from tourism edged down in the third quarter of this year from the same period last year, from EUR 9.12bn to EUR 9.06bn.

The balances in goods, primary and secondary income^[1] edged up from the third quarter of the year before.

Figure 1 Balance of payments – current and capital account

^a Sum of the last four quarters.
Source: CNB.

The positive balance in the financial account of the balance of payments (the difference between total assets acquired and total liabilities assumed) stood at EUR 5.30bn in the third quarter of 2024, up by EUR 380m from the same period of the previous year (Figure 2). This was largely the result of the decrease in the negative balance in the direct investment account (EUR 312.4m). International reserves, which after entry of the Republic of Croatia into the euro area mainly refer to the dollar portfolio managed by the Croatian National Bank, rose by EUR 175.3m in the observed period. The positive balance in the portfolio investment sub-account increased by EUR 126.7m, while the positive balance in the sub-account of other investment went down by EUR 201.1m from the same quarter of the previous year.

Figure 2 Balance of payments – financial account

^a Sum of the last four quarters.
Source: CNB.

If the last four quarters are observed (Table 1), the cumulative balance in the current and capital account stood at EUR 1.04bn or 1.2% of GDP, while that for the whole of 2023 stood at EUR 2.54bn or 3.0% of GDP. In the last four quarters, the financial account recorded a positive balance of EUR 2.57bn or 3.1% of GDP, in contrast with a positive balance of EUR 3.81bn or 4.6% of GDP recorded in 2023.

Table 1 Balance of payments

^a Sum of the last four quarters.

Notes: Positive net values for individual financial account components in Table 1 and Figure 2 indicate that transactions by which foreign assets are acquired are larger than the transactions by which foreign liabilities are assumed for a given financial account component over a given period or denote net capital outflow abroad. Negative values indicate that the transactions by which foreign assets are acquired are smaller than the transactions by which foreign liabilities are assumed for a given financial account component over a given period or denote net capital inflow from abroad.
Source: CNB.

The net international investment position (Figure 3) stood at EUR –18.7bn at the end of the third quarter of 2024, with the negative balance decreasing by EUR 5.82bn from the second quarter of 2024. The relative indicator of the net international investment position improved from –30.0% of GDP at the end of the second quarter of 2024 to –22.3% of GDP. The negative balance shrank by EUR 787.1m from the third quarter of 2023 (with the share in GDP standing at –25.8%).

Figure 3 International investment position

Notes: The net international investment position equals the difference between domestic sectors' foreign assets and liabilities at the end of a period. The negative value of the net international investment position indicates that foreign liabilities of Croatian residents are greater than their foreign assets. Included are assets and liabilities based on debt instruments, equity investments, financial derivatives, and other instruments.
Source: CNB.

Considering the share of the international investment position in GDP by type of investment (Figure 4), the share of net debt investment in GDP rose from 4.4% at the end of the second quarter of 2024 to 12.4% at the end of the third quarter of 2024, while the share of net equity investment fell slightly from –34.4% to –34.8%. For the sake of comparison, the share of net debt investment and net equity investment in GDP in the third quarter of 2023 stood at 5.4% and –31.9%, respectively.

Figure 4 Share of international investment position in GDP by type of investment

At the end of the third quarter of 2024, gross external debt (Figure 5) stood at EUR 63.0bn or 75.2% of GDP, down by EUR 0.7bn or 2.7 percentage points of GDP from the end of the second quarter of 2024. Gross external debt, which excludes the CNB (77.2% of the total gross external debt) dropped by EUR 0.4bn from the second quarter of 2024 or by 1.6 percentage points if the share of debt in GDP is observed.

Figure 5 Stock of gross external debt^[2]

Detailed balance of payments data
Detailed gross external debt data
Detailed data on the international investment position

1. Primary income consists of employee compensations and investment income (retained earnings, dividends, interest). Secondary income refers to current transfers (workers’ remittances, pensions, gifts and grants, taxes and contributions, flows of funds as part of international cooperation). ↑

2. After the Republic of Croatia joined the euro area, gross external debt increased by the amount of liabilities associated with the allocation of the euro banknotes within the Eurosystem. This amount is the difference between the amount of banknotes in circulation, the allocation to which the CNB is entitled according to the ECB’s key, and actually issued banknotes in circulation. In addition, this amount of liabilities is reduced by the estimated amount of euro banknotes in circulation in the Republic of Croatia that are issued under the ECB’s key of other euro area countries. Only the amount of the difference between the amount of banknotes in circulation, the allocation to which the CNB is entitled according to the ECB’s key, and the actually issued banknotes in circulation is recorded on the foreign claims side, so that the effect on the balance of net external debt is favourable since the balance of assets is larger than the balance of liabilities. ↑