Summary

• The current and capital account balance stood at EUR –895m in the second quarter of 2024, up from EUR –96m in the same quarter of the year before.
• The financial account of the balance of payments recorded a positive balance of EUR 74m (net capital outflow) in the second quarter of 2024, down from EUR 311m in the same quarter of the year before.
• The net international investment position stood at EUR –24.1bn or –30.2% of GDP at the end of the second quarter of 2024. The negative balance shrank by EUR 420m from the second quarter of 2023 (with the share in GDP standing at –33.8%).
• Gross external debt stood at EUR 63.3bn or 79.2% of GDP at the end of the second quarter of 2024.
• The time series data of the external statistics to which this Statistical release relates have been revised relative to previously released data. For information on the revision see link.

The current and capital account of the balance of payments (Figure 1) ran a deficit of EUR 895m in the second quarter of 2024, up by EUR 799m from the same period of the year before. This was mostly due to the goods sub-account, the negative balance of which rose by EUR 332m from the same quarter of the year before and the fall in the capital account of EUR 451m, mainly as a result of smaller distributions of EU funds in the form of capital transfers to end users compared to the unusually large amounts of such transfers in the same quarter of the previous year. The balances in goods, primary and secondary income^[1] changed slightly from the second quarter of the previous year.

Figure 1 Balance of payments ̶ current and capital account
¹Sum of the last four quarters.

Source: CNB.

The net capital outflow (the difference between total assets acquired and total liabilities assumed) in the financial account (Figure 2) stood at EUR 74m in the second quarter of 2024, down by EUR 237m from the same period of the previous year. The net capital outflow recorded was predominantly due to a somewhat larger outflow in the account of portfolio investments (EUR 318m). 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 during the observed period. The net outflow in the sub-account of direct investment amounted to negligible EUR 12m, and the sub-account of other investment recorded a net capital inflow of EUR 405m.

Figure 2 Balance of payments ̶ financial account
¹Sum 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 1.33bn or 1.7% of GDP while that for the whole of 2023 stood at EUR 2.54bn or 3.2% of GDP. In the last four quarters, the financial account recorded a net outflow of EUR 2.65bn or 3.3% of GDP, in contrast with a net outflow of EUR 3.81bn or 4.8% of GDP recorded in 2023.

Table 1 Balance of payments
* Sum of the last four quarters.

Note: 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 –24.1bn at the end of the second quarter of 2024, with the negative balance increasing by EUR 0.67bn from the first quarter of 2024. The relative indicator of the net international investment position worsened from –30.0% of GDP at the end of the first quarter of 2024 to –30.2% of GDP. The negative balance shrank by EUR 420m from the second quarter of 2023 (with the share in GDP standing at –33.8%).

Figure 3 International investment position

Note: 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 slightly from 5.1% at the end of the second quarter of 2024 to 5.2% , while the share of net equity investment fell slightly from –35.2% to –35.4%. For the sake of comparison, the share of net debt investment and net equity investment in GDP in the second quarter of 2023 stood at –2.6% and –32.0%, respectively.

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

At the end of the second quarter of 2024, gross external debt (Figure 5) stood at EUR 63.3bn or 79.2% of GDP, having risen by EUR 1.2bn or 0.2 percentage points of GDP from the end of the first quarter of 2024. Gross external debt, which excludes the CNB (76.4% of the total gross external debt) rose by EUR 2.2bn from the first quarter of 2024 or by 1.5 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. ↑