Balance of payments
18. Nov 2024
Balance of payments more than DKK 100 million higher than in 2022
The balance of payments on current accounts has seen sizeable surpluses since 2013. In 2023, revenues from sales of goods and services, income from overseas assets and transactions from abroad amounted to DKK 18.6 billion. Expenses amounted to DKK 17.3 billion in 2023, resulting in a current account surplus of DKK 1.3 billion.
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The balance of trade in goods has a surplus of DKK 1.3 billion, while the balance of trade in services has a deficit of DKK 1 billion. Compensation of employees and current transfers contribute to the total surplus with DKK 750 million and DKK 808 million, respectively. On the other hand, there is a deficit of financial revenues, where foreign nationals have DKK 1.4 billion in return on investments in the Faroes, while Faroese investments abroad yielded DKK 854 million.
The increase in the balance of payments is predominantly due to the balance of trade in goods increasing from DKK 788 million in 2022 to DKK 1,325 million in 2023.
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About the current account of the balance of payments
The balance of trade with other nations is based on questionnaires that Statistics Faroe Islands sends out to selected businesses. Due to this nature of information gathering, a certain degree of uncertainty is to be expected in the figures.
The balance of payments is a statement of all transactions made between entities in one country and the rest of the world. These transactions include trade of goods and services, income from labour and financial resources, and current transfers such as aid from the Danish state and social contribution from pension schemes and insurance claims.
These figures provide an insight into what type of services and transfers of primary and secondary income that take place between the Faroes and other nations.