Euro area balance of payments (February 2008)

In February 2008 the working day and seasonally adjusted current account of the euro area showed a surplus of EUR 4.3 billion. In the financial account, combined direct and portfolio investment showed net inflows of EUR 21 billion.

The working day and seasonally adjusted current account of the euro area recorded a surplus of EUR 4.3 billion in February 2008 (corresponding to a surplus of EUR 5.0 billion in non-seasonally adjusted terms). This reflected surpluses in goods (EUR 3.1 billion) and services (EUR 5.1 billion), which were partly compensated for by a deficit in current transfers (EUR 4.3 billion). The income account was close to balance.

The 12-month cumulated, working day-adjusted current account up to February 2008 recorded a surplus of EUR 17.8 billion (about 0.2% of euro area GDP), compared with a deficit of EUR 1.1 billion a year earlier. This change resulted mainly from increases in the surpluses in goods (from EUR 24.9 billion to EUR 52.7 billion) and services (from EUR 42.6 billion to EUR 53.2 billion), which were only partly offset by a shift in the income account from a surplus (EUR 10.1 billion) to a deficit (EUR 1.1 billion) and an increase in the deficit on current transfers (from EUR 78.7 billion to EUR 87.1 billion).

In the financial account, combined direct and portfolio investment recorded net inflows of EUR 21 billion in February 2008, reflecting net inflows in portfolio investment (EUR 35 billion) and net outflows in direct investment (EUR 14 billion).

The net outflows in direct investment resulted mainly from net outflows in equity capital and reinvested earnings (EUR 12 billion).

Portfolio investment recorded net inflows in equity (EUR 45 billion), reflecting both net purchases of euro area securities by non-residents (EUR 28 billion) and net sales of foreign securities by euro area residents (EUR 16 billion). Net outflows in money market instruments (EUR 9 billion) were mainly accounted for by net purchases of foreign securities by euro area residents (EUR 13 billion).

Other investment recorded net outflows of EUR 38 billion, mainly as a result of net outflows in other sectors (EUR 53 billion), the Eurosystem (EUR 14 billion) and general government (EUR 5 billion), which were partly offset by net inflows in MFIs excluding the Eurosystem (EUR 33 billion).

Reserve assets decreased by EUR 5 billion (excluding valuation effects). The stock of the Eurosystem’s reserve assets stood at EUR 375 billion at the end of February 2008.

In the 12-month period to February 2008, combined direct and portfolio investment showed cumulated net inflows of EUR 146 billion, compared with net inflows of EUR 231 billion a year earlier. This development largely resulted from a decrease in net inflows in portfolio investment (from EUR 351 billion to EUR 272 billion), which, in turn, mainly reflected lower net purchases of euro area bonds and notes by non-resident investors.

In addition to the balance of payments for February 2008, this press release incorporates revisions for January 2008. These revisions have not significantly altered the previously published statistics.

A complete set of updated euro area balance of payments and international investment position statistics is available on the ECB’s website in the “Statistics” section under the headings “Data services”/“Latest monetary, financial markets and balance of payments statistics”. These data, as well as the historical euro area balance of payments time series, can be downloaded from the ECB’s Statistical Data Warehouse (SDW). Results up to February 2008 will also be published in the May 2008 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 28 May 2008.

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.