Euro area balance of payments (July 2009)

In July 2009 the working day and seasonally adjusted current account of the euro area recorded a surplus of EUR 6.6 billion. In the financial account, combined direct and portfolio investment recorded net outflows of EUR 18 billion (non-seasonally adjusted).

The working day and seasonally adjusted current account of the euro area recorded a surplus of EUR 6.6 billion in July 2009 (corresponding to a surplus of EUR 8.8 billion in non-adjusted terms). This reflected surpluses in goods (EUR 11.2 billion) and services (EUR 2.7 billion), which were only partly offset by deficits in current transfers (EUR 5.7 billion) and income (EUR 1.6 billion).

The 12-month cumulated, working day-adjusted current account recorded a deficit of EUR 108.7 billion (around 1.2% of euro area GDP) in July 2009, compared with a deficit of EUR 44.0 billion a year earlier. The widening current account deficit was due to an increase in the deficit in income (from EUR 17.1 billion to EUR 44.0 billion) and decreases in the surpluses in services (from EUR 50.5 billion to EUR 29.2 billion) and goods (from EUR 18.2 billion to EUR 2.7 billion).

In the non-seasonally adjusted financial account, combined direct and portfolio investment recorded net outflows in July 2009 (EUR 18 billion), as the net outflows in portfolio investment (EUR 23 billion) significantly exceeded the net inflows in direct investment (EUR 5 billion).

The net inflows in direct investment resulted from net inflows in equity capital and reinvested earnings (EUR 8 billion), which were offset to a limited extent by net outflows in other capital (mostly inter-company loans) (EUR 2 billion).

Looking at the sub-components of portfolio investment, net outflows were recorded in debt instruments (EUR 42 billion), which were partly offset by net inflows in equity (EUR 19 billion). The developments in debt instruments mainly reflected non-residents’ net sales of euro area bonds and notes (EUR 60 billion), which were partly offset by non-residents’ net purchases of euro area money market instruments (EUR 20 billion).

Financial derivatives recorded net inflows of EUR 6 billion.

Other investment recorded net outflows of EUR 19 billion, mainly as a result of net outflows in other sectors (EUR 17 billion) and the Eurosystem (EUR 14 billion), which were partly offset by net inflows in MFIs excluding the Eurosystem (EUR 6 billion) and general government (EUR 4 billion).

Reserve assets increased by EUR 4 billion (excluding valuation effects). The Eurosystem’s stock of reserve assets stood at EUR 387 billion at the end of July 2009.

In the 12-month period to July 2009 combined direct and portfolio investment recorded cumulated net inflows of EUR 393 billion, compared with net outflows of EUR 43 billion for the preceding 12-month period. This shift resulted mainly from a substantial rise in net inflows in portfolio investment (from EUR 101 billion to EUR 547 billion), largely reflecting a shift from net outflows (EUR 29 billion) to net inflows (EUR 299 billion) in money market instruments. The rise in net inflows in portfolio investment was offset to a very limited extent by an increase in net outflows in direct investment (from EUR 144 billion to EUR 154 billion).

In addition to the balance of payments for July 2009, this press release incorporates revisions for June 2009. These revisions have not significantly altered the figures published previously.

A complete set of updated euro area balance of payments and international investment position statistics is available in the “Statistics” section of the ECB’s website under the headings “Data services”/“Latest monetary, financial markets and balance of payments statistics”. These data, as well as historical euro area balance of payments time series, can be downloaded from the ECB’s Statistical Data Warehouse (SDW). Data up to July 2009 will also be published in the October 2009 issues of the ECB’s Monthly Bulletin and Statistics Pocket Book. A detailed methodological note is available on the ECB’s website. The next press release on the euro area monthly balance of payments will be published on 22 October 2009.

Table 1: Current account of the euro area – working day and seasonally adjusted data

Table 2: Monthly balance of payments of the euro area – non-seasonally adjusted data