Monthly developments in March 2002

The current account surplus for the first quarter of 2002 stood at EUR 4.3 billion, compared with a deficit of EUR 10.5 billion for the first quarter of 2001. This was a result of the goods surplus increasing from EUR 5.5 billion in the first quarter of 2001 to EUR 21.1 billion in the first quarter of 2002, and the income deficit falling from EUR 9.1 billion to EUR 7.9 billion. The deficits for services and current transfers partly offset these developments, increasing by EUR 1.3 billion and EUR 0.7 billion respectively. The change in the goods balance was due to imports of goods decreasing at a higher rate than exports in the first quarter of 2002 as compared with the same period a year earlier (by 9.7% and 3.3% respectively), partly reflecting the significant decline in oil prices over this period. In the financial account, combined direct and portfolio investment in the euro area was almost balanced in March 2002, recording a small net inflow of EUR 2.2 billion. Direct investment in the euro area experienced net outflows of EUR 5.9 billion, whereas portfolio investment registered net inflows of EUR 8.1 billion. Net inflows in portfolio investment equity (EUR 4.2 billion) and in debt instruments (EUR 3.9 billion) contributed both to overall net inflows in the portfolio investment account. One noteworthy development in portfolio investment in March 2002 was the substantial net inflows in investment in euro area-issued bonds and notes by non-residents (EUR 17.4 billion). These were the first net inflows in four months and the third largest in this category since 2000. Finally, other sectors' liabilities in the other investment account experienced large net inflows of EUR 15.0 billion in March 2002.

Note on balance of payments statistics produced by the Eurosyste

Euro-indicators News Releases The results up to March 2002 will also be published in the June 2002 issue of the

The euro area current account recorded a surplus of EUR 3.7 billion in March 2002 compared with a deficit of EUR 0.6 billion in March 2001, largely resulting from an increase in the goods surplus (from EUR 6.0 billion in March 2001 to EUR 10.8 billion in March 2002), while the services and income deficits remained effectively unchanged and the current transfers deficit increased slightly (from EUR 4.0 billion in March 2001 to EUR 4.8 billion in March 2002). Looking at month-on-month developments on the basis of seasonally adjusted data, exports and imports of goods (in values) continued to rise in March 2002 compared with the previous month. This was the second month in succession that euro area exports and imports of goods increased. The increase was greater for imports than for exports, partly reflecting higher oil prices. Furthermore, both income credits and debits declined in March 2002 compared with the previous month; however, this resulted in only a marginal increase in the income deficit. Net outflows of EUR 8.2 billion in direct investment equity explain the net outflows in the direct investment account. The most salient feature in direct investment in March 2002 was the sizeable net equity investment of euro area residents abroad (EUR 14.9 billion), whereas equity investment of non-residents in the euro area recorded net inflows of EUR 6.7 billion. Overall, net outflows in combined direct and portfolio investment from the euro area have become smaller in the period from January to March 2002 (EUR 54.5 billion) as compared with the same period in 2001 (EUR 79.1 billion). These reduced net outflows are mainly explained by the reduction of net outflows in direct investment in the first quarter of 2002 (EUR 11.5 billion) compared with the first quarter of 2001 (EUR 40.6 billion). Moreover, net outflows related to portfolio investment equity also slowed to EUR 0.3 billion in the first quarter of 2002 compared with net outflows of EUR 10.4 billion in the first quarter of 2001. On the contrary, outflows related to portfolio investment debt instruments increased from EUR 28.1 billion in the first quarter of 2001 to EUR 42.8 billion during the same period in 2002. 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 balance of payments statistics on the basis of the data on extra-euro area transactions reported by euro area Member States.

ECB Monthly Bulletin

Annexes

. A detailed methodological note is available on the ECB's website.

Table 1 Table 2

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- Monthly balance of payments of the euro area for 2001 and 2002. - Euro area current account - seasonally adjusted data. Reproduction is permitted provided that the source is acknowledged