Monthly developments in April 2001

The cumulated current account deficit for the first four months of 2001 decreased to EUR 12.5 billion as compared with EUR 18.5 billion for the same period in 2000, as the higher goods surplus (EUR 12.0 billion for the first four months of 2001 compared with EUR 5.7 billion for the same period last year) coupled with a decrease in the deficit for current transfers (to EUR 6.9 billion for the first four months in 2001 from EUR 9.0 billion for the same period in 2000) outweighed the rise in the deficits for services and income. The increase in the goods surplus resulted mainly from the growth of export values (16.2%) outpacing that of import values (14.3%) during the period under consideration. Direct investment flows were in balance (EUR 0.1 billion) in April 2001, amid relatively low transaction activity. Equity capital investment abroad (EUR 10.3 billion) and equity capital investment in the euro area (EUR 2.5 billion) were lower in April 2001 than in most previous months. The net outflows in equity capital were compensated by inflows in "other capital, mostly intercompany loans". Net inflows in financial derivatives amounted to EUR 1.1 billion and in other investment to EUR 24.6 billion in April. Reserve assets decreased by EUR 7.0 billion (excluding valuation effects) and errors and omissions registered a negative EUR 10.7 billion in April 2001.

The current account of the euro area recorded a deficit of EUR 3.3 billion in April 2001 compared with a deficit of EUR 7.0 billion in April 2000 (all figures refer to Euro 12). This change in the current account balance can mainly be attributed to an increase in the goods surplus (to EUR 5.3 billion in April 2001 from EUR 2.5 billion in April 2000) combined with a shift in the balance for services to a small surplus (EUR 0.3 billion) from a modest deficit (EUR 0.7 billion) and a small decrease in the deficit of current transfers (to EUR 4.2 billion from EUR 4.8 billion), while the income deficit reported a slight increase. In the financial account, direct investment and portfolio investment of the euro area recorded a net outflow of EUR 20.8 billion in April 2001, with net outflows of EUR 20.9 billion in portfolio investment accounting for this development. The combined direct and portfolio investment net outflow amounted to EUR 106.8 billion for the first four months of 2001 vis-à-vis EUR 47.4 billion recorded during the same period in 2000. The largest contribution to the net capital outflows in April is due to transactions in debt instruments in portfolio investment, which registered net outflows of EUR 18.1 billion alone. Among the debt instruments, non-residents disinvested of euro area bonds and notes (EUR 11.3 billion) for only the second time since 1999. This compares to a net inflow of investment in euro area bonds and notes of, on average, around EUR 20 billion a month in 2000. Similarly, there was a substantial capital outflow of EUR 10.1 billion in April resulting from sales of euro area money market instruments by non-residents.

Note on balance of payments statistics produced by the Eurosystem

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Annex

The methodology used was developed in close co-operation with the European Commission (Eurostat) which publishes the Balance of Payments 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 2001 will also be published in the July 2001 issue of the . A detailed methodological note is available on the ECB's website.

Table 1

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: Euro area balance of payments - monthly developments in April 2001 and notional Euro 12 data for 2000. Reproduction is permitted provided that the source is acknowledged