Monthly developments in July 2002

Developments in the first seven months of 2002 show that the cumulated current account balance turned from a deficit of EUR 20.6 billion in the same period last year into a surplus of EUR 11.9 billion. A significant increase in the goods surplus (which more than doubled from EUR 32.3 billion to EUR 71.0 billion) is the main factor behind this development and is due to cumulated imports declining by around 7%, while cumulated exports are at roughly the same level as in the corresponding period last year. The higher goods surplus is only marginally offset by a slightly higher income deficit and a small reduction in the surplus for services. Meanwhile, the deficit for current transfers remained virtually unchanged. The net outflows in direct investment (EUR 3.6 billion) were the result of euro area investment abroad (EUR 9.3 billion), mainly in equity capital and reinvested earnings (EUR 12.2 billion). Direct investment in the euro area amounted to EUR 5.7 billion, of which EUR 2.2 billion in the sub-category "Equity capital and reinvested earnings" and EUR 3.5 billion in the "Other capital, mostly intercompany loans" sub-item. On a cumulated basis, in the first seven months of 2002 combined direct and portfolio investment recorded net outflows of EUR 6.0 billion, compared with EUR 103.4 billion during the same period in 2001.

Note on balance of payments statistics produced by the Eurosystem

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

The euro area current account showed a surplus of EUR 2.6 billion in July 2002 compared with a deficit of EUR 0.2 billion in July 2001. This development mainly resulted from an increase in the goods surplus (from EUR 10.9 billion to EUR 14.2 billion) together with a EUR 2.2 billion decrease in the deficit for current transfers, which more than offset a EUR 0.6 billion reduction in the surplus for services and a EUR 2.2 billion increase in the income deficit. On the basis of seasonally adjusted data, the value of both exports and imports of goods fell in July 2002 compared with the previous month. In the financial account, combined direct and portfolio investment in the euro area recorded net inflows of EUR 10.6 billion in July 2002, as net outflows in direct investment (EUR 3.6 billion) were offset by net inflows in portfolio investment (EUR 14.2 billion). The net inflows in portfolio investment of EUR 14.2 billion in July stemmed from large net inflows in bonds and notes (EUR 14.8 billion) owing to non-residents investment in euro area bonds and notes (EUR 17.8 billion). Investment in money market instruments also registered net inflows of EUR 3.6 billion owing to large non-residents transactions (EUR 9.3 billion) in instruments issued by euro area residents. Investment in equities was subdued on both the asset and the liability sides. Reserve assets increased by EUR 2.5 billion (excluding valuation effects), and net errors and omissions were EUR 8.1 billion. 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