ECONOMICS

Balance of Payments

Balance of Payments

Balance of Payment Sweden

Balance of payments for the third quarter of 2010 shows a slight reduction current account. The trade balance decreased and resulted in a capital inflow of 18.0 billion while the services balance was largely unchanged. The banks' reduced foreign borrowing resulted in outflows in financial account. For the second consecutive quarter, continued current account surplus to deteriorate and amounted to 50.3 billion. The trade balance was to 18.0 billion, which is a marked reduction compared to previous period (Montiel, 2009, pp. 58). After the recession in 2009 is now increasing trade again and during the year, both imports and exports of goods increased. Crown reinforcement; however, have lowered exports during the quarter resulting in a weaker trade balance (Taylor & Woodford, 1999, pp. 65). Trade in services was relatively unchanged. The financial account resulted in the quarter a net outflow of 60.8 billion. Swedish banks' reduced foreign borrowing was behind a net outflow of 87.3 billion in other investment item. While Swedish investors' purchases of foreign securities generated outflows of capital, the number of cross-border acquisitions has been increasing during the quarter, contributing to the low net outflow of 1.5 billion crowns in direct investments (Johnston & Ryan, 1994, pp. 103).

Balance of Payments for the third quarter of 2010 showed a surplus in current account deficit of 50.3 billion and a deficit of 60.8 billion in the financial account (Toyoda, 2011, pp. 178). The capital account showed, as before, a negative result. The current account resulted in a surplus of 50.3 billion net of the third quarter, which is a deterioration of SEK 5 billion from previous quarter (Krugman & Wells, 2006, pp. 159). The trade in goods and services accounted for a major Part of this surplus and gave the quarter a capital inflow of 49.2 billion. International trade in goods and services after the severe recession in 2009 now has world trade again gaining momentum. The increased demand is also reflected in the Swedish exports have recovered quickly in 2010 (Mankiw, 2000, pp. 369). Trade in goods resulted in a capital inflow of 18.0 billion net but this is a deterioration over the same quarter last year. Development explained by the import of goods has grown faster than exports. A factor that strongly affects trade in goods, the Swedish Krona and this year it has been strengthened by more than 9 percent (Hubbard & Brien, 2006, pp. 96). This means that Swedish goods more expensive abroad and it may therefore be an explanation for the weaker recovery of Swedish exports compared to imports. Compared to the previous year; exports increased by 16 percent and imports increased by 18 percent (Honkapohia, 2009, pp. 132).

Balance of Payments Finland

The international investment position has been recorded in its current form since 1975, and since then, Finns have had more debt than assets abroad. Finland's international investment position was changed for the first time in April 2010. At the end of October 2010 the Finnish foreign ...