Monthly developments in May 2000

In May 2000, the current account of the euro area recorded a deficit of EUR 0.6 billion, which was slightly smaller than the EUR 1.5 billion deficit recorded in May 1999. This change was due to decreases in the deficits in the income and current transfer accounts, while the surplus on trade in goods declined and the balance for services shifted from a small surplus to a deficit. Although the value of exports of goods grew strongly during the first five months of this year, rising by EUR 73.2 billion (or about 24%) relative to the corresponding period of last year, the value of imports rose even more rapidly, increasing by EUR 88.4 billion (or about 33%). The strong growth in the value of goods imports has been fostered by rising import prices, which reflect both higher oil prices and the depreciation of the euro, while the increase in the value of exports seems mainly to reflect rising export volumes. Turning to the financial account, both direct and portfolio investment recorded net outflows in May 2000, adding up to a combined net outflow of EUR 15.8 billion. Net direct investment outflows accounted for EUR 10.7 billion, of which EUR 6.2 billion were outflows of equity capital and reinvested earnings, while outflows of other capital, which comprises mostly inter-company loans, amounted to EUR 4.5 billion. Portfolio investment recorded net outflows of EUR 5.1 billion, mainly as a result of total net equity outflows of EUR 13.9 billion, which were only partly offset by net inflows of EUR 8.8 billion in debt instruments, mainly in bonds and notes (EUR 6.8 billion), but also in money market instruments (EUR 2.0 billion). In the first five months of 2000, combined net direct and portfolio investment outflows reached EUR 74.5 billion, and were thus substantially lower than in the same period of 1999 (EUR 118.8 billion). In particular, a net inflow of EUR 53.8 billion in euro area debt instruments was reported between January and May 2000, as compared with net outflows of EUR 34.1 billion in the same period of the previous year. This development reflects both an increase in investment in euro area bonds and notes by non-residents (to EUR 76.1 billion, up from EUR 21.4 billion) and a decline of investment in foreign bonds and notes by euro area residents (to EUR 51.9 billion, down from EUR 81.9 billion). Annex 1 (  pdf 9 kB,

In addition to the balance of payments (b.o.p.) monthly key items for May 2000, this release incorporates a revised and more detailed set of b.o.p. statistics for the first quarter of 2000. These quarterly statistics include a breakdown of the income item of the current account and additional information on sectors and instruments for the b.o.p. financial account; for the first time, direct investment is shown broken down by equity capital and reinvested earnings, on the one hand, and other capital, mostly inter-company loans, on the other. The full set of new quarterly data will be presented in the August 2000 issue of the ECB Monthly Bulletin. In the first five months of 2000, the current account of the euro area recorded a deficit of EUR 11.7 billion, compared with a surplus of EUR 9.6 billion for the same period last year. This was primarily due to a lower goods surplus (EUR 20.2 billion, down from EUR 35.3 billion) combined with a rise in the deficit on services (EUR 6.7 billion, up from EUR 2.9 billion), while the deficits on income and current transfers registered smaller increases of EUR 1.9 billion and EUR 0.4 billion respectively. In May 2000, the net balance on the capital account declined marginally to EUR 0.6 billion, compared with EUR 1.4 billion in May 1999. Between January to May of this year, the capital account registered a surplus of EUR 5.0 billion, compared with EUR 4.7 billion in the corresponding months of last year. Elsewhere in the financial account, net inflows in financial derivatives reached EUR 0.3 billion in May 2000, while those in other investment amounted to EUR 21.2 billion. Eurosystem reserve assets fell by EUR 1.3 billion in May 2000. Errors and omissions amounted to a negative EUR 7 billion in May 2000, and to a negative EUR 53.2 billion in the first five months of 2000.

en ECB Monthly Bulletin In the light of new information, the ECB has revised the b.o.p monthly key items for the first quarter of 2000 ( Annex 2, pdf 7 kB,

 ) to this press release contains statistics produced by the Eurosystem in respect of the balance of payments (b.o.p.) of the euro area; the methodology has been developed in close co-operation with the European Commission (Eurostat) which publishes the b.o.p. for the European Union. The ECB compiles these statistics on the basis of the data on extra-euro area transactions reported by euro area countries. The results for April 2000 will also be published in the July 2000 issue of the . A detailed methodological note on euro area b.o.p. statistics is available on the ECB's website in the section Euro area statistics - download.

en

European Central Bank Press and Information Division Kaiserstrasse 29, D-60311 Frankfurt am Main Tel.: +49 69 13 44 74 55, Fax: +49 69 13 44 74 04 Internet: http://www.ecb.europa.eu

 ). As a result, the current account deficit for the first quarter of 2000 has been revised upwards from EUR 1.2 billion to EUR 7.9 billion, primarily on account of a EUR 6 billion downward revision in the goods surplus from EUR 15.3 billion to EUR 9.3 billion, together with minor revisions to the remaining items of the current account. The net inflow in the financial account for the first quarter of 2000 was revised downwards from EUR 60.2 billion to EUR 47.8 billion, mainly reflecting higher net portfolio investment outflows. Reproduction is permitted provided that the source is acknowledged