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67-001-XIE
Canada's balance of international payments
System of National Accounts
First quarter 2004

Analysis — First quarter 2004

Canada’s current account surplus with the rest of the world, on a seasonally adjusted basis, rose $2.8 billion in the first quarter of 2004 to $9.5 billion, its highest level in three years. A higher surplus on trade in goods led to the increase.

Chart 1
Current account balance

Chart 1 Current account balance

The capital and financial account (not seasonally adjusted) showed funds flowing out of Canada to the rest of the world for a fourth straight quarter. Canada’s direct and portfolio assets abroad went up, but at a slower pace than in the fourth quarter. And there were offsetting changes to Canada’s liabilities: non-residents invested in direct and portfolio securities, but residents reduced some of their deposit liabilities.

During the quarter, the Canadian dollar declined slightly against the US dollar after its strong appreciation over 2003. However, against other foreign currencies the story was mixed as the Canadian dollar was up against the Euro, but down sharply against the British pound and the Japanese yen.

Note to readers

The balance of payments covers all economic transactions between Canadian residents and non-residents. It includes the current account and the capital and financial account.

The current account covers transactions on goods, services, investment income and current transfers. Transactions in exports and interest income are examples of receipts, while imports and interest expense are payments. The balance from these transactions determines if Canada's current account is in surplus or deficit.

The capital and financial account mainly comprises of transactions in financial instruments. Financial assets and liabilities with non-residents are presented under three functional classes: direct investment, portfolio investment and other investment. These investments belong either to Canadian residents (Canadian assets) or to foreign residents (Canadian liabilities). Transactions resulting in a capital inflow are presented as positive values, while capital outflows from Canada are shown as negative values.

A current account surplus or deficit should correspond to an equivalent outflow or inflow in the capital and financial account. In other words, the two accounts should add to zero. In fact, as data are compiled from multiple sources, the two balance of payments accounts rarely equate. As a result, the statistical discrepancy is the net unobserved inflow or outflow needed to balance the accounts.

Revised estimates for Canadian money market securities

With this release, the quarterly series covering Canadian money market transactions and positions with non-residents have been revised back to the first quarter of 2003 using a new method. Money market securities are now estimated using an instrument by instrument approach as has been the case for long-term debt for many years. In the coming quarters, the new system will allow the production of increased detail on Canadian money market instruments (i.e., by currency of instrument) and also estimates for foreign money market paper owned by Canadians.

Current account

Goods surplus rebounds

The surplus on trade in goods reached $17.5 billion in the first quarter, up $3.4 billion from the fourth quarter.

After three quarters of decline, exports increased by $4.0 billion to $101.5 billion. Once again, the largest change came from energy products as prices rebounded. Higher exports of industrial goods, and machinery and equipment products were led by exports of aircraft, engines and parts. Exports of automotive products fell slightly, but have remained relatively stable over the last four quarters.

Imports increased by $0.5 billion to $84.0 billion. Imports of industrial goods and machinery and equipment products each increased approximately half a billion dollars. Automotive product imports declined by $0.5 billion, reversing most of the gain observed in the fourth quarter.

Chart 2
Goods and other Current Account balances

Chart 2 Goods and other Current Account balances

Lower profits earned on direct investment abroad

The deficit on investment income increased $0.5 billion to $5.0 billon as profits earned on Canadian direct investment abroad dropped $0.7 billion. Despite this, Canada registered its second lowest deficit on investment income in more than 12 years.

The $4.3 billion of profits earned abroad were lower as a result of declines in the electrical products and wood and paper sectors. These reductions were partially offset by higher profits in the finance and insurance sector.

At the same time, profits earned by foreign investors on their direct investments in Canada decreased $0.2 billion. The largest decrease came from the finance and insurance sector.

Services deficit remains stable

In the first quarter, the deficit on trade in services declined by $0.1 billion to $3.0 billion. All major components saw little change from the previous quarter.

Payments on travel services increased more than receipts as the number of Canadians travelling abroad remained relatively stable, while slightly fewer foreign visitors (especially from the United States) came to Canada. The first quarter deficit in travel services at $1.3 billion was the highest since the end of 1993.

Chart 3
Canadian direct investment abroad1

Chart 3 Canadian direct investment abroad1

The transportation deficit increased slightly. This increase was concentrated in goods transportation as the deficit on passenger fares did not change. A small, widely spread improvement in the commercial services deficit partially offset these declines.

Financial account

Direct investment abroad moderate

After the robust $19.3 billion investment of the fourth quarter, Canadian direct investment abroad returned to a moderate $4.8 billion in the first quarter. It was a level similar to the first three quarters of 2003. About a third of the quarter's investment went to the acquisition of a number of foreign enterprises. Just under half was invested in American companies with the rest geographically spread out. Industrially, the investment was led by the energy and financial industry groups.

Chart 4
Canadian portfolio investment abroad1

Chart 4 Canadian portfolio investment abroad1

Canadian investment in foreign securities concentrated in bonds

Canadian investors bought $2.7 billion of foreign securities in the first quarter, just half the value of the fourth quarter of 2003. It was, however, in line with the five quarters prior to the fourth quarter.

Canadians bought $2.6 billion worth of foreign bonds, half of which went to overseas bonds, the most in four years. The remainder went to US corporate bonds and US treasuries. While overall Canadian investment in foreign equities was negligible, investors bought $2.7 billion worth of US shares while selling a similar amount of overseas shares.

Foreign direct investment returns to Canada after two negative quarters

The foreign acquisition of a Canadian corporation helped raise foreign direct investment to $5.3 billion in the quarter. This came after two negative quarters when foreign investors withdrew funds from Canada. Over two-thirds of first quarter direct investment came from the United States. On an industry basis, the foreign investment went to the communications sector. At the same time, the machinery and transportation equipment industry saw some withdrawals of funds.

Chart 5
Foreign portfolio investment in Canada

Chart 5 Foreign portfolio investment in Canada

Foreign portfolio investment in Canadian securities continues

Foreign portfolio investment of $4.4 billion flowed into Canadian securities in the quarter, after the major $10.1 billion injection in the fourth quarter. Foreign demand for Canadian equities continued; while for debt instruments, foreign investors purchased Canadian bonds, but sold a similar amount of money market securities.

With Canadian stock prices continuing to increase in the first quarter, foreign investors purchased $4.3 billion of Canadian equities. Some $5.6 billion was invested in existing shares, partly offset by a $1.3 billion outflow, related to the acquisition noted earlier. Foreign investment in existing shares was at a three-and-a-half year high. Foreign investors bought a wide array of stocks led by issues of resource companies, manufacturers, and banks.

Chart 6
Foreign portfolio investment in Canadian bonds

Chart 6 Foreign portfolio investment in Canadian bonds

Canadian bonds continued to attract foreign investment during the quarter as foreign investors bought $2.9 billion worth of bonds issued by federal enterprises and corporations. The investment originated in the United States and Asia. On a currency basis, foreign investors acquired $3.0 billion and $1.2 billion respectively of Canadian-dollar and US-dollar denominated bonds, but sold $1.3 billion denominated in other foreign currencies.

Foreign holdings of Canadian money market paper were reduced by $2.8 billion in the quarter. Two-thirds of the reduction was in federal treasury bills with the rest split between paper issued by corporations and federal enterprises.

Other investment

In the first quarter, net transactions in the other investment category led to capital outflows. This reversed a similar capital inflow registered in these accounts in the fourth quarter. Principally, deposit liabilities of Canadian banks were drawn down in the first quarter. There was a small increase to Canada's international reserves halting six consecutive quarters of decline.

Text table 1
Balance of payments, all countries, not seasonally adjusted - Quarterly and annual, 2001 to 2002

                                            2001 2002
I II III IV Annual I II III IV Annual
  millions of dollars
Current account  
Receipts  
Goods and services 126,064 126,236 116,154 112,928 481,383 113,742 121,640 121,645 120,667 477,694
Goods 112,420 111,003 97,903 99,332 420,657 99,910 105,890 102,125 105,870 413,795
Services 13,645 15,233 18,252 13,596 60,725 13,832 15,750 19,520 14,797 63,899
Investment income 7,770 7,964 5,447 4,685 25,866 7,152 7,674 7,832 8,527 31,185
Direct investment income 2,300 2,937 813 327 6,377 2,850 3,105 3,348 4,321 13,624
Portfolio investment income 1,918 1,998 2,025 2,020 7,960 2,291 2,549 2,492 2,296 9,628
Other investment income 3,552 3,029 2,610 2,339 11,529 2,011 2,021 1,992 1,910 7,934
Current transfers 1,974 1,519 1,597 1,880 6,970 1,961 1,448 1,532 2,015 6,957
Total current account 135,808 135,719 123,199 119,493 514,219 122,854 130,763 131,009 131,209 515,836
Payments  
Goods and services 106,684 110,134 100,644 101,150 418,612 100,861 110,520 106,749 109,253 427,382
Goods 89,270 93,240 83,386 84,787 350,682 83,914 92,880 88,204 91,582 356,581
Services 17,414 16,894 17,258 16,363 67,930 16,947 17,640 18,544 17,671 70,801
Investment income 18,659 17,969 14,766 13,836 65,231 14,583 13,740 15,029 16,487 59,839
Direct investment income 7,150 7,304 4,326 3,483 22,263 4,649 4,213 5,419 6,389 20,670
Portfolio investment income 7,512 7,612 7,660 7,800 30,585 7,511 7,540 7,684 7,730 30,466
Other investment income 3,997 3,053 2,780 2,553 12,383 2,423 1,987 1,925 2,368 8,702
Current transfers 1,764 1,069 1,237 1,302 5,373 2,005 1,137 1,369 1,440 5,951
Total current account 127,108 129,172 116,647 116,289 489,216 117,449 125,397 123,147 127,179 493,171
Balances  
Goods and services 19,380 16,102 15,511 11,778 62,770 12,881 11,120 14,896 11,415 50,312
Goods 23,150 17,763 14,517 14,545 69,975 15,995 13,010 13,921 14,288 57,214
Services -3,769 -1,661 994 -2,768 -7,204 -3,114 -1,890 976 -2,874 -6,903
Investment income -10,889 -10,005 -9,319 -9,152 -39,365 -7,432 -6,065 -7,196 -7,960 -28,653
Direct investment income -4,850 -4,366 -3,514 -3,156 -15,886 -1,799 -1,108 -2,071 -2,068 -7,046
Portfolio investment income -5,594 -5,614 -5,636 -5,781 -22,625 -5,221 -4,991 -5,192 -5,434 -20,838
Other investment income -445 -24 -170 -214 -854 -412 34 67 -458 -769
Current transfers 209 450 360 578 1,598 -44 311 163 575 1,006
Total current account 8,700 6,547 6,552 3,204 25,003 5,405 5,366 7,863 4,030 22,664
Capital and financial account  1 , 2  
Capital account, net flows 1,440 1,573 1,705 1,066 5,784 1,423 1,485 1,176 903 4,988
Financial account, net flows -3,239 -11,948 -27 -5,948 -21,163 1,098 675 -9,398 -10,212 -17,837
Canadian assets, net flows  
Canadian direct investment abroad -14,353 -22,303 -12,274 -6,989 -55,918 -6,470 -7,151 -12,275 -15,576 -41,472
Canadian portfolio investment -15,086 -12,412 -4,871 -5,204 -37,573 -11,496 -6,987 -3,682 -2,923 -25,087
Foreign bonds -1,048 180 -1,354 301 -1,920 -2,442 -2,299 -1,472 -16 -6,229
Foreign stocks -14,038 -12,592 -3,518 -5,505 -35,653 -9,053 -4,688 -2,210 -2,907 -18,858
Other Canadian investment 948 2,876 2,204 -26,279 -20,251 -7,821 1,693 -351 -6,726 -13,206
Loans 2,786 -3,091 -1,155 -6,759 -8,219 -2,652 2,151 -1,428 -6,253 -8,182
Deposits 868 7,746 4,483 -15,268 -2,172 -1,190 1,575 2,460 2,887 5,731
Official international reserves -2,490 135 130 -1,128 -3,353 -696 -1,450 1,885 559 298
Other assets -215 -1,914 -1,253 -3,124 -6,507 -3,282 -583 -3,268 -3,920 -11,053
Canadian assets, net flows -28,491 -31,839 -14,941 -38,472 -113,743 -25,787 -12,445 -16,308 -25,225 -79,765
Canadian liabilities, net flows  
Foreign direct investment in Canada 9,751 18,506 6,117 8,186 42,561 17,019 8,452 1,899 5,656 33,026
Foreign portfolio investment 10,588 7,639 -6,552 26,835 38,509 3,844 8,020 -213 9,283 20,935
Canadian bonds 9,261 6,690 1,402 24,380 41,733 6,498 2,895 5,655 3,635 18,684
Canadian stocks 6,531 963 -3,997 629 4,125 -3,960 4,781 -4,076 1,724 -1,531
Canadian money market -5,204 -14 -3,957 1,826 -7,349 1,305 344 -1,791 3,925 3,782
Other foreign investment 4,913 -6,254 15,348 -2,498 11,510 6,022 -3,353 5,223 74 7,967
Loans -5,244 1,633 5,294 -8,177 -6,493 827 -2,917 1,850 1,640 1,400
Deposits 12,342 -6,879 10,867 7,386 23,716 7,465 1,868 5,353 -1,119 13,568
Other liabilities -2,185 -1,008 -813 -1,707 -5,713 -2,271 -2,304 -1,980 -447 -7,001
Canadian liabilities, net flows 25,253 19,891 14,913 32,524 92,580 26,885 13,120 6,909 15,013 61,928
Total capital and financial account, net flows -1,799 -10,375 1,678 -4,883 -15,379 2,522 2,160 -8,222 -9,309 -12,850
Statistical discrepancy and inter-area transfers -6,901 3,828 -8,230 1,679 -9,624 -7,927 -7,526 359 5,279 -9,815
1. In the capital and financial account, a minus sign denotes an outflow of capital resulting from an increase in claims on non-residents or a decrease in liabilities to non-residents.
2. Transactions are recorded on a net basis.

Text table 2
Balance of payments, all countries, not seasonally adjusted - Quarterly and annual, 2003 to 2004

                                                     2003 2004
I II III IV Annual I II III IV Annual
  millions of dollars
Current account  
Receipts  
Goods and services 119,596 115,187 112,766 112,425 459,974 116,351 .. .. .. ..
Goods 105,638 100,587 95,292 98,493 400,010 102,561 .. .. .. ..
Services 13,958 14,600 17,475 13,932 59,964 13,790 .. .. .. ..
Investment income 7,052 8,172 8,354 9,122 32,700 8,099 .. .. .. ..
Direct investment income 2,729 4,140 4,348 5,239 16,455 4,307 .. .. .. ..
Portfolio investment income 2,367 2,359 2,353 2,243 9,321 2,204 .. .. .. ..
Other investment income 1,956 1,673 1,654 1,640 6,923 1,589 .. .. .. ..
Current transfers 1,913 1,490 1,490 1,820 6,714 1,878 .. .. .. ..
Total current account 128,561 124,849 122,611 123,367 499,388 126,328 .. .. .. ..
Payments  
Goods and services 106,798 106,404 98,449 101,037 412,688 102,580 .. .. .. ..
Goods 88,644 89,126 80,420 83,643 341,833 84,077 .. .. .. ..
Services 18,155 17,278 18,029 17,393 70,855 18,503 .. .. .. ..
Investment income 16,149 13,424 13,483 13,387 56,443 14,019 .. .. .. ..
Direct investment income 6,518 4,696 4,896 4,774 20,884 5,355 .. .. .. ..
Portfolio investment income 7,545 7,188 7,129 6,893 28,755 6,843 .. .. .. ..
Other investment income 2,086 1,541 1,458 1,719 6,804 1,820 .. .. .. ..
Current transfers 2,124 1,321 1,475 1,520 6,440 2,163 .. .. .. ..
Total current account 125,071 121,149 113,407 115,943 475,570 118,761 .. .. .. ..
Balances  
Goods and services 12,798 8,783 14,318 11,388 47,287 13,771 .. .. .. ..
Goods 16,994 11,461 14,872 14,850 58,177 18,484 .. .. .. ..
Services -4,197 -2,678 -554 -3,462 -10,891 -4,713 .. .. .. ..
Investment income -9,097 -5,252 -5,129 -4,265 -23,743 -5,919 .. .. .. ..
Direct investment income -3,789 -556 -548 464 -4,429 -1,048 .. .. .. ..
Portfolio investment income -5,178 -4,829 -4,777 -4,650 -19,433 -4,639 .. .. .. ..
Other investment income -130 132 196 -80 119 -232 .. .. .. ..
Current transfers -211 169 14 301 274 -285 .. .. .. ..
Total current account 3,490 3,700 9,204 7,424 23,818 7,566 .. .. .. ..
Capital and financial account  1 , 2  
Capital account, net flows 1,000 985 1,067 917 3,968 851 .. .. .. ..
Financial account, net flows 3,550 -13,012 -6,456 -8,775 -24,694 -4,231 .. .. .. ..
Canadian assets, net flows  
Canadian direct investment abroad -4,679 -2,743 -3,510 -19,258 -30,191 -4,753 .. .. .. ..
Canadian portfolio investment -1,349 -3,204 -2,812 -5,154 -12,519 -2,697 .. .. .. ..
Foreign bonds -3,501 -2,664 -5 -1,901 -8,071 -2,607 .. .. .. ..
Foreign stocks 2,151 -540 -2,807 -3,253 -4,449 -89 .. .. .. ..
Other Canadian investment -23,541 3,959 2,227 -8,046 -25,401 1,488 .. .. .. ..
Loans -5,625 2,913 6,256 2,627 6,171 -309 .. .. .. ..
Deposits -17,387 3,066 292 -9,205 -23,234 -1,714 .. .. .. ..
Official international reserves 2,711 229 4 1,749 4,693 -236 .. .. .. ..
Other assets -3,240 -2,249 -4,325 -3,217 -13,030 3,747 .. .. .. ..
Canadian assets, net flows -29,569 -1,988 -4,095 -32,459 -68,111 -5,961 .. .. .. ..
Canadian liabilities, net flows  
Foreign direct investment in Canada 5,233 5,679 -863 -827 9,222 5,319 .. .. .. ..
Foreign portfolio investment 7,956 9,204 -8,820 10,130 18,469 4,415 .. .. .. ..
Canadian bonds 9,131 6,161 -12,240 3,947 7,000 2,884 .. .. .. ..
Canadian stocks -265 2,575 5,394 5,227 12,931 4,304 .. .. .. ..
Canadian money market -910 467 -1,975 956 -1,461 -2,772 .. .. .. ..
Other foreign investment 19,930 -25,907 7,323 14,380 15,726 -8,003 .. .. .. ..
Loans 1,013 -3,480 -264 4,472 1,741 1,774 .. .. .. ..
Deposits 21,200 -20,592 7,525 10,131 18,265 -10,377 .. .. .. ..
Other liabilities -2,284 -1,835 61 -223 -4,280 600 .. .. .. ..
Canadian liabilities, net flows 33,119 -11,024 -2,361 23,683 43,417 1,730 .. .. .. ..
Total capital and financial account, net flows 4,550 -12,027 -5,389 -7,859 -20,725 -3,380 .. .. .. ..
Statistical discrepancy and inter-area transfers -8,040 8,328 -3,814 434 -3,092 -4,186 .. .. .. ..
1. In the capital and financial account, a minus sign denotes an outflow of capital resulting from an increase in claims on non-residents or a decrease in liabilities to non-residents.
2. Transactions are recorded on a net basis.

Text table 3
Current account, all countries, seasonally adjusted - Quarterly and annual, 2001 to 2002

                                                   2001 2002
I II III IV Annual I II III IV Annual
  millions of dollars
Receipts, seasonally adjusted  
Goods and services  
Goods 111,807 109,072 101,582 98,195 420,656 100,743 103,300 105,183 104,570 413,796
Services 15,276 15,304 15,068 15,078 60,726 15,450 15,858 16,247 16,344 63,899
Travel 4,240 4,264 4,029 3,881 16,414 4,187 4,070 4,199 4,291 16,747
Transportation 2,769 2,703 2,581 2,521 10,574 2,636 2,764 2,763 2,952 11,115
Commercial services 7,900 7,964 8,094 8,316 32,274 8,252 8,658 8,944 8,745 34,599
Government services 366 372 364 361 1,463 375 367 340 356 1,438
Goods and services 127,083 124,376 116,650 113,273 481,382 116,193 119,158 121,430 120,914 477,695
Investment income  
Direct investment income 2,228 3,023 853 273 6,377 2,803 3,195 3,386 4,240 13,624
Direct investment income, interest 80 84 91 90 345 104 117 122 128 471
Direct investment income, profits 2,148 2,939 762 183 6,032 2,699 3,078 3,264 4,112 13,153
Portfolio investment income 1,917 1,970 2,008 2,065 7,960 2,290 2,504 2,469 2,364 9,627
Portfolio investment income, interest 512 516 506 480 2,014 463 494 392 426 1,775
Portfolio investment income, dividends 1,405 1,454 1,503 1,585 5,947 1,827 2,010 2,078 1,939 7,854
Other investment income 3,599 3,053 2,573 2,303 11,528 2,033 2,040 1,970 1,891 7,934
Investment income 7,744 8,046 5,435 4,641 25,866 7,125 7,739 7,825 8,495 31,184
Current transfers  
Private transfers 634 573 625 606 2,438 681 606 663 617 2,567
Official transfers 1,079 1,107 1,153 1,193 4,532 1,045 1,014 1,029 1,300 4,388
Current transfers 1,714 1,680 1,778 1,799 6,971 1,726 1,621 1,692 1,917 6,956
Total current account 136,541 134,102 123,863 119,713 514,219 125,044 128,518 130,947 131,326 515,835
Payments, seasonally adjusted  
Goods and services  
Goods 89,578 89,644 87,441 84,019 350,682 85,507 88,560 91,445 91,069 356,581
Services 17,097 17,080 16,862 16,890 67,929 16,734 17,803 18,040 18,224 70,801
Travel 4,920 4,844 4,557 4,313 18,634 4,416 4,677 4,556 4,682 18,331
Transportation 3,753 3,525 3,363 3,226 13,867 3,233 3,527 3,674 3,689 14,123
Commercial services 8,226 8,501 8,729 9,135 34,591 8,866 9,380 9,589 9,629 37,464
Government services 198 210 213 215 836 218 219 221 224 882
Goods and services 106,676 106,724 104,304 100,909 418,613 102,241 106,363 109,485 109,293 427,382
Investment income  
Direct investment income 6,516 7,134 4,487 4,127 22,264 3,935 4,093 5,676 6,966 20,670
Direct investment income, interest 596 595 552 549 2,292 383 342 322 338 1,385
Direct investment income, profits 5,920 6,538 3,935 3,578 19,971 3,552 3,751 5,353 6,628 19,284
Portfolio investment income 7,442 7,609 7,675 7,859 30,585 7,447 7,542 7,698 7,778 30,465
Portfolio investment income, interest 6,703 6,803 6,852 6,992 27,350 6,823 6,852 6,996 7,042 27,713
Portfolio investment income, dividends 739 806 823 868 3,236 624 690 702 736 2,752
Other investment income 3,736 3,201 2,937 2,509 12,383 2,175 2,138 2,054 2,336 8,703
Investment income 17,693 17,944 15,099 14,495 65,231 13,557 13,774 15,427 17,081 59,839
Current transfers  
Private transfers 704 727 742 755 2,928 820 848 849 865 3,382
Official transfers 596 608 605 636 2,445 686 534 666 683 2,569
Current transfers 1,299 1,335 1,346 1,391 5,371 1,506 1,382 1,515 1,548 5,951
Total current account 125,668 126,003 120,749 116,795 489,215 117,303 121,519 126,428 127,922 493,172
Balances, seasonally adjusted  
Goods and services  
Goods 22,229 19,428 14,141 14,176 69,974 15,236 14,740 13,738 13,501 57,215
Services -1,821 -1,776 -1,794 -1,812 -7,203 -1,284 -1,945 -1,793 -1,880 -6,902
Travel -679 -581 -528 -432 -2,220 -229 -608 -357 -391 -1,585
Transportation -984 -822 -782 -706 -3,294 -596 -763 -910 -737 -3,006
Commercial services -326 -536 -635 -820 -2,317 -614 -722 -645 -884 -2,865
Government services 168 162 151 145 626 156 148 119 132 555
Goods and services 20,407 17,652 12,347 12,364 62,770 13,952 12,795 11,945 11,621 50,313
Investment income  
Direct investment income -4,288 -4,111 -3,634 -3,854 -15,887 -1,132 -898 -2,290 -2,726 -7,046
Direct investment income, interest -516 -511 -460 -459 -1,946 -279 -225 -200 -210 -914
Direct investment income, profits -3,772 -3,600 -3,173 -3,395 -13,940 -853 -673 -2,089 -2,516 -6,131
Portfolio investment income -5,525 -5,639 -5,667 -5,794 -22,625 -5,157 -5,038 -5,229 -5,414 -20,838
Portfolio investment income, interest -6,191 -6,288 -6,346 -6,511 -25,336 -6,360 -6,358 -6,604 -6,617 -25,939
Portfolio investment income, dividends 666 649 679 717 2,711 1,202 1,320 1,376 1,203 5,101
Other investment income -137 -148 -363 -206 -854 -142 -98 -84 -445 -769
Investment income -9,950 -9,898 -9,664 -9,854 -39,366 -6,431 -6,035 -7,602 -8,586 -28,654
Current transfers  
Private transfers -69 -155 -117 -149 -490 -140 -242 -186 -248 -816
Official transfers 484 499 548 557 2,088 360 481 363 617 1,821
Current transfers 414 344 431 408 1,597 220 239 177 369 1,005
Total current account 10,872 8,099 3,115 2,918 25,004 7,741 6,999 4,520 3,404 22,664

Text table 4
Current account, all countries, seasonally adjusted - Quarterly and annual, 2003 to 2004

                                                     2003 2004
I II III IV Annual I II III IV Annual
  millions of dollars
Receipts, seasonally adjusted  
Goods and services  
Goods 105,857 98,578 98,030 97,545 400,010 101,498 .. .. .. ..
Services 15,417 14,700 14,757 15,090 59,964 15,115 .. .. .. ..
Travel 4,020 3,443 3,552 3,732 14,747 3,773 .. .. .. ..
Transportation 2,701 2,430 2,517 2,637 10,285 2,680 .. .. .. ..
Commercial services 8,357 8,484 8,338 8,372 33,551 8,334 .. .. .. ..
Government services 340 344 349 350 1,383 328 .. .. .. ..
Goods and services 121,274 113,279 112,786 112,635 459,974 116,613 .. .. .. ..
Investment income  
Direct investment income 2,697 4,229 4,398 5,131 16,455 4,390 .. .. .. ..
Direct investment income, interest 217 171 185 175 748 112 .. .. .. ..
Direct investment income, profits 2,480 4,058 4,213 4,956 15,707 4,278 .. .. .. ..
Portfolio investment income 2,367 2,312 2,327 2,315 9,321 2,220 .. .. .. ..
Portfolio investment income, interest 439 432 463 480 1,814 462 .. .. .. ..
Portfolio investment income, dividends 1,927 1,881 1,864 1,836 7,508 1,757 .. .. .. ..
Other investment income 1,973 1,692 1,637 1,622 6,924 1,600 .. .. .. ..
Investment income 7,036 8,233 8,362 9,068 32,699 8,210 .. .. .. ..
Current transfers  
Private transfers 685 589 651 632 2,557 672 .. .. .. ..
Official transfers 1,021 1,061 1,000 1,073 4,155 1,004 .. .. .. ..
Current transfers 1,707 1,650 1,651 1,706 6,714 1,676 .. .. .. ..
Total current account 130,018 123,163 122,799 123,409 499,389 126,498 .. .. .. ..
Payments, seasonally adjusted  
Goods and services  
Goods 89,960 85,260 83,143 83,469 341,832 83,987 .. .. .. ..
Services 17,890 17,428 17,501 18,035 70,854 18,159 .. .. .. ..
Travel 4,731 4,284 4,590 5,002 18,607 5,122 .. .. .. ..
Transportation 3,581 3,450 3,603 3,592 14,226 3,674 .. .. .. ..
Commercial services 9,353 9,470 9,082 9,213 37,118 9,135 .. .. .. ..
Government services 225 224 226 228 903 228 .. .. .. ..
Goods and services 107,851 102,689 100,644 101,505 412,689 102,146 .. .. .. ..
Investment income  
Direct investment income 6,026 4,646 5,174 5,039 20,885 4,839 .. .. .. ..
Direct investment income, interest 452 462 474 475 1,863 492 .. .. .. ..
Direct investment income, profits 5,574 4,184 4,700 4,564 19,022 4,347 .. .. .. ..
Portfolio investment income 7,470 7,195 7,147 6,942 28,754 6,799 .. .. .. ..
Portfolio investment income, interest 6,728 6,503 6,429 6,189 25,849 6,161 .. .. .. ..
Portfolio investment income, dividends 743 692 718 753 2,906 639 .. .. .. ..
Other investment income 1,871 1,681 1,592 1,660 6,804 1,608 .. .. .. ..
Investment income 15,367 13,521 13,913 13,641 56,442 13,246 .. .. .. ..
Current transfers  
Private transfers 873 906 902 925 3,606 942 .. .. .. ..
Official transfers 707 746 704 676 2,833 673 .. .. .. ..
Current transfers 1,580 1,653 1,606 1,601 6,440 1,616 .. .. .. ..
Total current account 124,798 117,863 116,163 116,747 475,571 117,008 .. .. .. ..
Balances, seasonally adjusted  
Goods and services  
Goods 15,897 13,318 14,887 14,075 58,177 17,511 .. .. .. ..
Services -2,473 -2,728 -2,744 -2,945 -10,890 -3,044 .. .. .. ..
Travel -712 -842 -1,038 -1,271 -3,863 -1,349 .. .. .. ..
Transportation -879 -1,020 -1,086 -955 -3,940 -994 .. .. .. ..
Commercial services -996 -986 -744 -841 -3,567 -801 .. .. .. ..
Government services 114 120 123 121 478 101 .. .. .. ..
Goods and services 13,424 10,590 12,142 11,130 47,286 14,467 .. .. .. ..
Investment income  
Direct investment income -3,329 -417 -776 92 -4,430 -449 .. .. .. ..
Direct investment income, interest -235 -291 -289 -300 -1,115 -380 .. .. .. ..
Direct investment income, profits -3,094 -126 -487 392 -3,315 -69 .. .. .. ..
Portfolio investment income -5,104 -4,883 -4,820 -4,626 -19,433 -4,580 .. .. .. ..
Portfolio investment income, interest -6,288 -6,072 -5,966 -5,709 -24,035 -5,698 .. .. .. ..
Portfolio investment income, dividends 1,185 1,189 1,146 1,083 4,603 1,119 .. .. .. ..
Other investment income 102 11 45 -38 120 -8 .. .. .. ..
Investment income -8,331 -5,288 -5,551 -4,572 -23,742 -5,037 .. .. .. ..
Current transfers  
Private transfers -188 -317 -251 -293 -1,049 -270 .. .. .. ..
Official transfers 314 315 296 397 1,322 331 .. .. .. ..
Current transfers 127 -2 45 104 274 60 .. .. .. ..
Total current account 5,220 5,300 6,636 6,662 23,818 9,490 .. .. .. ..

Text table 5
International transactions in services by detailed category, not seasonally adjusted - Quarterly and annual, 2001 to 2002

                                                  2001 2002
I II III IV Annual I II III IV Annual
  millions of dollars
Receipts  
Travel 2,754 4,338 6,556 2,766 16,414 2,769 4,104 6,761 3,113 16,747
Business travel 583 782 745 540 2,650 514 794 826 603 2,737
Personal travel 2,171 3,556 5,810 2,226 13,763 2,255 3,310 5,935 2,510 14,010
Transportation 2,378 2,778 3,074 2,345 10,575 2,292 2,842 3,253 2,730 11,117
Water transport 493 616 556 604 2,269 510 654 625 683 2,472
Air transport 1 1,015 1,261 1,698 929 4,903 923 1,233 1,693 1,137 4,986
Land and other transport 870 900 819 811 3,400 859 955 934 909 3,657
Commercial services 8,152 7,740 8,248 8,134 32,274 8,403 8,432 9,159 8,605 34,599
Communication services 568 574 582 593 2,317 611 588 610 606 2,415
Construction services 83 77 84 79 323 43 40 43 41 167
Insurance services 844 851 939 1,069 3,703 1,119 1,207 1,284 1,281 4,891
Other financial services 308 282 260 310 1,160 340 353 392 408 1,493
Computer and information services 923 858 941 880 3,602 835 871 902 843 3,451
Royalties and licence fees 953 898 986 913 3,750 916 919 1,074 880 3,789
Non-financial commissions 176 168 176 167 687 174 167 177 169 687
Equipment rentals 77 75 77 76 305 80 77 81 78 316
Management services 986 917 1,004 941 3,848 1,057 982 1,072 1,008 4,119
Advertising and related services 143 134 146 137 560 131 123 133 126 513
Research and development 777 722 792 741 3,032 759 705 773 724 2,961
Architectural, engineering, and other technical services 744 705 754 718 2,921 719 875 1,029 883 3,506
Miscellaneous services to business 2 1,049 1,023 1,017 1,016 4,105 1,065 1,030 1,052 1,018 4,165
Audio-visual services 521 457 490 495 1,963 556 497 535 541 2,129
Government services 361 377 375 351 1,464 368 372 348 350 1,438
Total, all services 13,645 15,233 18,252 13,596 60,726 13,832 15,750 19,520 14,797 63,899
Payments  
Travel 5,601 5,015 4,333 3,685 18,634 5,049 4,883 4,387 4,014 18,333
Business travel 897 983 708 814 3,402 820 953 754 903 3,430
Personal travel 4,705 4,032 3,625 2,871 15,233 4,229 3,930 3,633 3,111 14,903
Transportation 3,710 3,479 3,603 3,076 13,868 3,167 3,487 3,952 3,516 14,122
Water transport 1,214 1,312 1,360 1,260 5,146 1,114 1,324 1,533 1,446 5,417
Air transport 1 1,828 1,489 1,616 1,190 6,123 1,405 1,475 1,732 1,398 6,010
Land and other transport 668 678 627 625 2,598 649 688 687 673 2,697
Commercial services 7,898 8,201 9,105 9,388 34,592 8,504 9,063 9,980 9,917 37,464
Communication services 478 503 528 556 2,065 545 550 565 577 2,237
Construction services 21 22 26 26 95 22 23 26 26 97
Insurance services 1,260 1,278 1,368 1,508 5,414 1,581 1,653 1,763 1,767 6,764
Other financial services 586 646 528 801 2,561 522 838 692 667 2,719
Computer and information services 330 339 385 380 1,434 359 371 427 421 1,578
Royalties and licence fees 1,289 1,355 1,551 1,545 5,740 1,478 1,568 1,820 1,827 6,693
Non-financial commissions 162 168 194 191 715 142 149 172 170 633
Equipment rentals 168 171 183 183 705 162 165 179 178 684
Management services 1,182 1,224 1,446 1,357 5,209 1,192 1,162 1,330 1,322 5,006
Advertising and related services 118 123 146 143 530 116 121 144 141 522
Research and development 322 336 399 392 1,449 312 325 386 379 1,402
Architectural, engineering, and other technical services 370 386 458 450 1,664 437 455 541 532 1,965
Miscellaneous services to business 2 1,068 1,107 1,294 1,273 4,742 1,098 1,139 1,332 1,311 4,880
Audio-visual services 543 543 599 582 2,267 537 545 602 597 2,281
Government services 205 199 217 215 836 227 207 226 223 883
Total, all services 17,414 16,894 17,258 16,363 67,929 16,947 17,640 18,544 17,671 70,802
1. International passenger fares by water are included under air transport.
2. Personal, cultural and recreational services are included with miscellaneous services to business.

Text table 6
International transactions in services by detailed category, not seasonally adjusted - Quarterly and annual, 2003 to 2004

                                                        2003 2004
I II III IV Annual I II III IV Annual
  millions of dollars
Receipts  
Travel 2,781 3,467 5,672 2,826 14,746 2,674 .. .. .. ..
Business travel 611 532 673 573 2,389 515 .. .. .. ..
Personal travel 2,170 2,934 4,999 2,253 12,356 2,159 .. .. .. ..
Transportation 2,391 2,506 2,875 2,512 10,284 2,378 .. .. .. ..
Water transport 575 654 642 708 2,579 605 .. .. .. ..
Air transport 1 935 968 1,406 998 4,307 937 .. .. .. ..
Land and other transport 882 885 827 806 3,400 836 .. .. .. ..
Commercial services 8,450 8,279 8,570 8,252 33,551 8,415 .. .. .. ..
Communication services 598 582 583 600 2,363 604 .. .. .. ..
Construction services 32 32 39 36 139 32 .. .. .. ..
Insurance services 1,203 1,134 1,111 1,076 4,524 1,087 .. .. .. ..
Other financial services 364 338 374 410 1,486 356 .. .. .. ..
Computer and information services 789 780 832 789 3,190 797 .. .. .. ..
Royalties and licence fees 889 882 990 813 3,574 898 .. .. .. ..
Non-financial commissions 157 198 190 178 723 158 .. .. .. ..
Equipment rentals 80 86 86 91 343 86 .. .. .. ..
Management services 1,054 982 1,033 964 4,033 1,064 .. .. .. ..
Advertising and related services 134 128 143 133 538 136 .. .. .. ..
Research and development 686 724 764 722 2,896 693 .. .. .. ..
Architectural, engineering, and other technical services 848 831 894 843 3,416 856 .. .. .. ..
Miscellaneous services to business 2 1,038 1,005 975 985 4,003 1,048 .. .. .. ..
Audio-visual services 579 575 556 611 2,321 599 .. .. .. ..
Government services 335 348 358 341 1,382 324 .. .. .. ..
Total, all services 13,958 14,600 17,475 13,932 59,965 13,790 .. .. .. ..
Payments  
Travel 5,438 4,486 4,435 4,249 18,608 5,893 .. .. .. ..
Business travel 879 925 696 889 3,389 872 .. .. .. ..
Personal travel 4,559 3,561 3,738 3,360 15,218 5,021 .. .. .. ..
Transportation 3,495 3,419 3,899 3,412 14,225 3,586 .. .. .. ..
Water transport 1,267 1,428 1,458 1,408 5,561 1,298 .. .. .. ..
Air transport 1 1,572 1,316 1,844 1,435 6,167 1,685 .. .. .. ..
Land and other transport 656 675 597 569 2,497 603 .. .. .. ..
Commercial services 8,988 9,161 9,465 9,505 37,119 8,787 .. .. .. ..
Communication services 556 531 569 590 2,246 540 .. .. .. ..
Construction services 19 21 27 23 90 19 .. .. .. ..
Insurance services 1,693 1,697 1,796 1,810 6,996 1,692 .. .. .. ..
Other financial services 586 659 560 710 2,515 584 .. .. .. ..
Computer and information services 365 369 378 326 1,438 354 .. .. .. ..
Royalties and licence fees 1,597 1,648 1,745 1,737 6,727 1,549 .. .. .. ..
Non-financial commissions 171 146 157 162 636 166 .. .. .. ..
Equipment rentals 158 174 180 148 660 153 .. .. .. ..
Management services 1,163 1,239 1,376 1,300 5,078 1,129 .. .. .. ..
Advertising and related services 155 160 171 156 642 151 .. .. .. ..
Research and development 365 334 337 339 1,375 354 .. .. .. ..
Architectural, engineering, and other technical services 461 500 516 431 1,908 447 .. .. .. ..
Miscellaneous services to business 2 1,102 1,095 1,071 1,158 4,426 1,073 .. .. .. ..
Audio-visual services 595 588 583 614 2,380 577 .. .. .. ..
Government services 234 211 230 228 903 237 .. .. .. ..
Total, all services 18,155 17,278 18,029 17,393 70,855 18,503 .. .. .. ..
1. International passenger fares by water are included under air transport.
2. Personal, cultural and recreational services are included with miscellaneous services to business.

Text table 7
International transactions in services by detailed category, seasonally adjusted - Quarterly and annual, 2001 to 2002

                                                  2001 2002
I II III IV Annual I II III IV Annual
  millions of dollars
Receipts  
Travel 4,240 4,264 4,029 3,881 16,414 4,187 4,070 4,199 4,291 16,747
Business travel 729 692 611 619 2,651 645 720 691 681 2,737
Personal travel 3,511 3,572 3,418 3,262 13,763 3,542 3,350 3,508 3,610 14,010
Transportation 2,769 2,703 2,581 2,521 10,574 2,636 2,764 2,763 2,952 11,115
Water transport 565 587 553 565 2,270 583 622 625 642 2,472
Air transport 1 1,320 1,258 1,198 1,128 4,904 1,183 1,231 1,194 1,379 4,987
Land and other transport 884 858 830 828 3,400 870 911 944 931 3,656
Commercial services 7,900 7,964 8,094 8,316 32,274 8,252 8,658 8,944 8,745 34,599
Communication services 568 574 582 593 2,317 611 588 610 606 2,415
Construction services 83 77 84 79 323 43 40 43 41 167
Insurance services 854 863 939 1,047 3,703 1,128 1,223 1,282 1,258 4,891
Other financial services 308 282 260 310 1,160 340 353 392 408 1,493
Computer and information services 887 890 916 909 3,602 822 899 874 856 3,451
Royalties and licence fees 926 930 930 964 3,750 908 958 991 931 3,788
Non-financial commissions 175 172 170 169 686 174 171 171 172 688
Equipment rentals 77 75 77 76 305 80 77 81 78 316
Management services 914 951 982 1,001 3,848 990 1,019 1,048 1,062 4,119
Advertising and related services 137 139 142 142 560 128 128 129 129 514
Research and development 752 764 761 756 3,033 754 741 740 725 2,960
Architectural, engineering, and other technical services 729 723 718 750 2,920 725 895 971 914 3,505
Miscellaneous services to business 2 1,007 1,034 1,032 1,032 4,105 1,029 1,036 1,066 1,033 4,164
Audio-visual services 483 490 501 488 1,962 521 531 546 532 2,130
Government services 366 372 364 361 1,463 375 367 340 356 1,438
Total, all services 15,276 15,304 15,068 15,078 60,726 15,450 15,858 16,247 16,344 63,899
Payments  
Travel 4,920 4,844 4,557 4,313 18,634 4,416 4,677 4,556 4,682 18,331
Business travel 935 915 769 782 3,401 841 877 835 877 3,430
Personal travel 3,984 3,929 3,788 3,531 15,232 3,576 3,801 3,722 3,805 14,904
Transportation 3,753 3,525 3,363 3,226 13,867 3,233 3,527 3,674 3,689 14,123
Water transport 1,340 1,300 1,260 1,246 5,146 1,235 1,321 1,422 1,437 5,415
Air transport 1 1,745 1,568 1,467 1,343 6,123 1,351 1,539 1,556 1,564 6,010
Land and other transport 668 657 636 636 2,597 647 667 695 688 2,697
Commercial services 8,226 8,501 8,729 9,135 34,591 8,866 9,380 9,589 9,629 37,464
Communication services 489 514 524 539 2,066 558 561 560 559 2,238
Construction services 21 22 26 26 95 22 23 26 26 97
Insurance services 1,272 1,290 1,363 1,490 5,415 1,601 1,674 1,749 1,740 6,764
Other financial services 586 646 528 801 2,561 522 838 692 667 2,719
Computer and information services 346 355 363 369 1,433 379 389 403 409 1,580
Royalties and licence fees 1,371 1,428 1,449 1,492 5,740 1,582 1,649 1,705 1,757 6,693
Non-financial commissions 175 179 180 181 715 151 160 161 162 634
Equipment rentals 168 171 183 183 705 162 165 179 178 684
Management services 1,266 1,303 1,335 1,305 5,209 1,276 1,236 1,227 1,267 5,006
Advertising and related services 118 123 146 143 530 116 121 144 141 522
Research and development 322 336 399 392 1,449 312 325 386 379 1,402
Architectural, engineering, and other technical services 370 386 458 450 1,664 437 455 541 532 1,965
Miscellaneous services to business 2 1,161 1,183 1,200 1,199 4,743 1,193 1,219 1,238 1,231 4,881
Audio-visual services 561 566 575 565 2,267 555 566 579 581 2,281
Government services 198 210 213 215 836 218 219 221 224 882
Total, all services 17,097 17,080 16,862 16,890 67,929 16,734 17,803 18,040 18,224 70,801
1. International passenger fares by water are included under air transport.
2. Personal, cultural and recreational services are included with miscellaneous services to business.

Text table 8
International transactions in services by detailed category, seasonally adjusted - Quarterly and annual, 2003 to 2004

                                                        2003 2004
I II III IV Annual I II III IV Annual
  millions of dollars
Receipts  
Travel 4,020 3,443 3,552 3,732 14,747 3,773 .. .. .. ..
Business travel 752 469 547 622 2,390 618 .. .. .. ..
Personal travel 3,268 2,974 3,005 3,110 12,357 3,155 .. .. .. ..
Transportation 2,701 2,430 2,517 2,637 10,285 2,680 .. .. .. ..
Water transport 654 619 641 664 2,578 685 .. .. .. ..
Air transport 1 1,154 967 1,041 1,144 4,306 1,148 .. .. .. ..
Land and other transport 893 843 836 828 3,400 846 .. .. .. ..
Commercial services 8,357 8,484 8,338 8,372 33,551 8,334 .. .. .. ..
Communication services 598 582 583 600 2,363 604 .. .. .. ..
Construction services 32 32 39 36 139 32 .. .. .. ..
Insurance services 1,206 1,150 1,109 1,059 4,524 1,091 .. .. .. ..
Other financial services 364 338 374 410 1,486 356 .. .. .. ..
Computer and information services 788 801 803 798 3,190 802 .. .. .. ..
Royalties and licence fees 886 924 900 865 3,575 894 .. .. .. ..
Non-financial commissions 158 203 182 180 723 161 .. .. .. ..
Equipment rentals 80 86 86 91 343 86 .. .. .. ..
Management services 994 1,019 1,008 1,011 4,032 1,006 .. .. .. ..
Advertising and related services 132 134 137 136 539 134 .. .. .. ..
Research and development 697 752 730 718 2,897 709 .. .. .. ..
Architectural, engineering, and other technical services 869 844 836 867 3,416 876 .. .. .. ..
Miscellaneous services to business 2 1,007 1,008 988 1,000 4,003 1,018 .. .. .. ..
Audio-visual services 546 611 564 601 2,322 565 .. .. .. ..
Government services 340 344 349 350 1,383 328 .. .. .. ..
Total, all services 15,417 14,700 14,757 15,090 59,964 15,115 .. .. .. ..
Payments  
Travel 4,731 4,284 4,590 5,002 18,607 5,122 .. .. .. ..
Business travel 893 849 782 865 3,389 887 .. .. .. ..
Personal travel 3,838 3,436 3,808 4,138 15,220 4,235 .. .. .. ..
Transportation 3,581 3,450 3,603 3,592 14,226 3,674 .. .. .. ..
Water transport 1,410 1,416 1,345 1,390 5,561 1,444 .. .. .. ..
Air transport 1 1,518 1,378 1,653 1,618 6,167 1,630 .. .. .. ..
Land and other transport 653 655 605 584 2,497 600 .. .. .. ..
Commercial services 9,353 9,470 9,082 9,213 37,118 9,135 .. .. .. ..
Communication services 570 540 564 572 2,246 553 .. .. .. ..
Construction services 19 21 27 23 90 19 .. .. .. ..
Insurance services 1,720 1,722 1,774 1,779 6,995 1,727 .. .. .. ..
Other financial services 586 659 560 710 2,515 584 .. .. .. ..
Computer and information services 383 384 355 315 1,437 370 .. .. .. ..
Royalties and licence fees 1,710 1,725 1,629 1,663 6,727 1,656 .. .. .. ..
Non-financial commissions 177 157 147 155 636 169 .. .. .. ..
Equipment rentals 158 174 180 148 660 153 .. .. .. ..
Management services 1,247 1,317 1,270 1,244 5,078 1,211 .. .. .. ..
Advertising and related services 155 160 171 156 642 151 .. .. .. ..
Research and development 365 334 337 339 1,375 354 .. .. .. ..
Architectural, engineering, and other technical services 461 500 516 431 1,908 447 .. .. .. ..
Miscellaneous services to business 2 1,188 1,166 993 1,081 4,428 1,149 .. .. .. ..
Audio-visual services 614 609 560 597 2,380 593 .. .. .. ..
Government services 225 224 226 228 903 228 .. .. .. ..
Total, all services 17,890 17,428 17,501 18,035 70,854 18,159 .. .. .. ..
1. International passenger fares by water are included under air transport.
2. Personal, cultural and recreational services are included with miscellaneous services to business.

Annual revisions, 2000-2003

Annual and quarterly data have been revised for reference years 2000 to 2003. This is in keeping with the general policy to revise National Accounts statistics back four years at the time of the first quarter data release. Broadly, the revisions reflect more current sources of information coming from annual surveys and administrative data.

The latest set of revisions reduced the Current account surplus every year from 2000 to 2003 while increasing the net outflows for the Capital and Financial Account.

Current Account revisions

Current account surpluses have been revised downward for each year of the period 2000 to 2003 as upward revisions to payments were larger than those to receipts.

On a gross basis, the most important revisions came in commercial services where estimates for the year 2002 have been replaced by results from the annual survey on services. Estimates for 2003 have been revised in accordance with this new information.

Major revisions have been made to the insurance sector, particularly for reinsurance where the level of transactions has continued to grow in 2002 after posting large gains in 2001. Canadian insurance firms have ceded more business to foreign insurance companies but recovered more claims from foreign firms than previously estimated. Both exports and imports of royalties and license fees have been increased strongly due to more recent information. Management services have also been revised upward, especially on the export side.

Other categories of services have been less affected by revisions. The only important correction to travel relates to payments on education-related travel following a downward revision to the number of Canadians studying abroad. Following the most recent exercise of reconciliation of the bilateral current account between Canada and United States, some Canadian components in transportation have been revised to be in line with U.S. equivalent series.

With regard to imports and exports of goods, the revisions to Customs data have been generally small. The largest revision came in the undercoverage of exports where values have been reduced by an average of $800 million in each of the revised years. Several other adjustments have been revised as more recent information became available. The adjustment for the valuation of small parcels imported to Canada was revised downward as the latest figures showed a decline in the volumes while the adjustment for unrecorded imports of cigarettes has been increased. Payments for inland freight on imports by road from United States also have been revised upward.

Large revisions have also been made to investment income mainly from the acquisition of better data. From 2000 to 2002, receipts have been reduced while payments have increased for the four years from 2000 to 2003. Profits earned abroad by Canadian direct investors have been largely revised downward from 2000 to 2002. In 2003, the revision was positive due to larger than estimated dividends. Profits on foreign direct investment in Canada have also been revised upward, except for 2002.

A change in the methodology to generate the dividend payments on portfolio investment brought large upward changes, especially for 2001 and 2002. Instead of using general yields, a more specific link was made with the information reported by the surveyed firms. Based on the 2003 results from the Canadian portfolio investment survey, portfolio dividends receipts have been increased for that year. The 2002 increase in this category is the result of a re-estimation of the yield that was applied to the position. The new methodology for estimating flows on money market instruments brought down the payments of interest on these instruments for 2003. See the following section on Capital and Financial Account revisions for more details.

In current transfers, payments of personal remittances have been revised upward with the latest results from the survey of household spending. Receipts of withholding tax were revised upward in 2003 as final figures replace previous estimates.

Capital and Financial Account revisions

The overall impact of revisions to the Capital and Financial Account were significant for all years under revision except 2002. For all years, revisions resulted in net inflows albeit a smaller one for 2002.

The year 2003 saw the largest revision as an increase in liabilities accounted for all the revisions to net inflows. The main contributing factor resulted from the implementation of a new method for estimating Canadian money market transactions. The new system that processes these securities is based on an instrument by instrument approach and resulted in more accurate data. The other contributor was an increase in foreign direct investment in Canada due to additional survey data that led to higher reinvested earnings based on higher profits.

The second largest revisions resulting in net inflows occurred in 2000, mostly due to downward revisions to assets. Liabilities were revised upward, but only marginally. On the asset side, the revision came exclusively from Canadian direct investment abroad where long-term outflows and increases to reinvested earnings were both reduced. In liabilities accounts, small revisions to Canadian bonds and loan liabilities accounted for the increase to liabilities.

Revisions for 2001 were concentrated in liability accounts. New issues of Canadian bonds were revised upward as a transaction previously classified in the foreign direct investment category was reclassified based on improved survey data. Other than this, foreign direct investment was revised down but less than the change mentioned above as there were offsetting changes. On the asset side, revisions lowered Canadian direct investment abroad but these inflows were mostly offset by an increase in other investment category.

Finally, changes to the year 2002 were significant as annual survey data replaced quarterly sample data which in total amounted to a small net inflow. On the asset side, Canadian direct investment abroad was lowered substantially as short-term inter-company accounts were revised as well as reinvested earnings. These substantial inflows were largely offset by upward revisions to the other investment asset category. On the other side of the ledger, additional information led to a reduction in other investment category that was partly offset by an increase in foreign direct investment in Canada due to an upward revision to reinvested earnings.

Text table 9
Balance of payments — Annual revisions 2000-2003

                                                        2000 2001 2002 2003
  in millions of dollars
Current account  
Balances  
Goods and services -18 274 796 -1,438
Goods -791 -912 -631 -2,032
Customs data -110 63 184 -232
BOP adjustments -681 -975 -816 -1,801
Services 773 1,186 1,428 595
Travel 0 -92 268 438
Transportation 14 58 364 527
Government services -7 0 -32 -84
Commercial services 766 1,220 828 -287
Investment income -1,292 -2,051 -1,143 -255
Direct investment -1,063 -1,299 -1,667 -790
Portfolio investment -201 -942 481 464
Other investment -29 190 43 72
Current transfers -133 -85 -355 -272
Total balances -1,444 -1,861 -701 -1,965
Revision to undercoverage of goods exports -700 -1,000 -914 -925
All other revisions -744 -861 213 -1,039
Capital and financial account  
Capital account 44 106 171 52
Financial account 3,367 2,303 124 3,922
Canadian assets, net flows 2,801 315 1,060 5
Canadian direct investment abroad 2,896 818 3,745 -156
Portfolio investment -95 0 -137 0
Other investment 1 -503 -2,548 161
Canadian liabilities, net flows 565 1,988 -936 3,917
Foreign direct investment in Canada 50 -2,047 684 969
Portfolio investment 246 3,840 -123 3,290
Other investment 269 196 -1,497 -342
Total capital and financial account, net flows 3,411 2,409 295 3,974
Statistical discrepancy -1,967 -548 407 -2,009

Text table 10
Canada's Balance of international payments with Mexico - Selected components

                                                        1998 1999 2000 2001 2002 2003
  millions of dollars
Current account  
Receipts  
Goods exports 1 1,467 1,612 2,034 2,755 2,419 2,217
Commercial services 181 183 185 228 206 203
Travel 2 112 130 174 187 229 205
Payments  
Goods imports, 1 3 3,552 4,371 6,545 6,849 6,849 6,833
Commercial services 107 82 105 115 103 104
Travel 2 555 571 702 701 684 806
Financial account  
Canadian direct investment in Mexico –947 –157 –345 (4) 0 38
Mexican direct investment in Canada +73 –13 (4) (4) (4) (4)
Canadian banks'net foreign currency and Canadian dollar transactions with Mexico –212 –234 +283 –449 +228 –242
1. Goods exports and imports on a Customs basis.
2. Travel excludes Health-related and Education-related spending, and Crew spending.
3. Country of last consignment basis.
4. Data suppressed to avoid disclosure of data of individual companies.

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Date Modified: 2004-07-23 Important Notices