Balance of payments
21. Nov 2024
Foreign assets near DKK 5 billion in 2023
Faroese foreign liabilities of DKK 2.5 billion in 2022 turned into DKK 5.1 billion in net assets by 2023. Rising share prices from 2022 to 2023, together with a decrease in foreign securities holdings in Faroese companies, contributed to this significant DKK 7.6 billion net-asset increase.
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All sectors increased their net assets. The financial and insurance companies increased their net assets by just under DKK 1 billion, as assets have increased and liabilities have decreased. Companies have in recent years had net liabilities to foreign countries of about DKK 15 billion on average per year. The figure for 2022 was slightly higher because the companies took some large loans in 2022. However, liabilities have dropped significantly in 2023.
The public sector increased its foreign assets by DKK 1.5 billion. The foreign debt has increased by a quarter of a billion DKK, resulting in a net-asset increase of just over DKK 1.2 billion.
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More than half of Faroese assets abroad are held in bonds. Bond interest rates have been low in recent years, as is reflected in a decrease of almost DKK 6 billion for bond assets from 2020 to 2022. Bond assets increased again from 2022 to 2023 by more than DKK 1 billion.
Just under half of liabilities are associated with foreign investments in Faroese enterprises. This figure has increased every year up until 2022. It is, however, worth noting that this increase is largely the result of value fluctuation rather than an increase in foreign investments in the Faroes. The value of shares dropped by almost DKK 4 billion from 2022 to 2023. The loan debt grew to DKK 7.4 billion after the financial crisis. The debt decreased from 2010 to 2018. There was a slight increase in the debt from 2018 to 2021, but over the past two years the debt has increased from DKK 5.4 billion to DKK 9.1 billion.
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Foreign assets and liabilities
These statistics give an overview of Faroese assets and liabilities abroad. Net assets are the value of assets minus liabilities. If net assets are positive, the rest of the world owes money to the Faroe Islands. The foreign assets and liabilities statistics show the Faroese balance sheet in relation to the rest of the world at the end of every year. The figures are divided into institutional sectors and type of financial instrument. The sectors are non-financial companies, financial companies, public administration and services and households. The asset types that together form the calculation of assets and liabilities include direct investments, shares, bonds, deposits and loans.
Revised figures
In connection with this report, Statistics Faroe Islands has revised its figures for assets and liabilities. Statistics Faroe Islands has also reassessed and updated the statistical analysis of assets and liabilities in accordance with guidelines in international manuals. Statistics Faroe Islands collects information from major companies and institutions. This information is validated against other sources and information that Statistics Faroe Islands has obtained through registers from tax authority TAKS. If a company or an institution has not submitted its information, a calculated figure will be set for the assets and liabilities of the company or the institution.