Monthly developments in May 2003 and revised data from October 2002 to April 2003

Seasonally adjusted current account in surplus

From a longer-term perspective, the seasonally adjusted current account surplus in May is somewhat smaller than the monthly surpluses recorded earlier in 2003 and significantly smaller than those observed in the second half of 2002 (see Table 1). This is mainly attributable to a decrease in the goods and services surpluses, reflecting lower exports.

Following a deficit of EUR 1.0 billion in April, the seasonally adjusted current account of the euro area showed a surplus of EUR 2.0 billion in May 2003 (corresponding to a deficit of EUR 0.4 billion in non-seasonally adjusted terms). This reflected a surplus of EUR 9.5 billion in goods, which was only partly offset by deficits in income (EUR 3.0 billion) and current transfers (EUR 4.6 billion). The services item was balanced. The recent decrease in the current account surplus is also reflected in the 12-month cumulated surplus which peaked towards the end of last year and then declined moderately in the first five months of 2003 (see chart). Nevertheless, the 12-month cumulated current account surplus up to May 2003 is still much higher than it was one year earlier (EUR 49.1 billion, i.e. around 0.7% of GDP, as compared with EUR 15.2 billion in the 12 months to May 2002).

Increased purchases of euro area bonds and notes by non-residents

The developments in portfolio investment were mostly due to increased net purchases of euro area bonds and notes by non-resident investors, reaching EUR 46.0 billion and thereby a higher level than recorded so far. These inflows more than offset net purchases of foreign securities (that is both equities and debt instruments) by euro area investors (EUR 30.4 billion) as well as net sales of euro area equity securities by non-euro area residents (EUR 7.9 billion). The other investment account recorded net outflows of EUR 39.7 billion in May 2003, mostly as a consequence of a rise of EUR 31.5 billion in the net MFI position for this item. In addition, "other sectors" increased their assets (mainly loans and deposits abroad) by EUR 9.6 billion. Template on international reserves and foreign currency liquidity In the 12-month period to May 2003, combined direct and portfolio investment recorded cumulated net inflows of EUR 57.6 billion, as compared with EUR 94.9 billion a year earlier. This resulted mainly from larger net outflows in direct investment, stemming in particular from a decrease in investment by non-residents in "other capital" in the euro area (mainly inter-company loans), down from EUR 83.2 billion to EUR 18.7 billion. Cumulated portfolio investment inflows were similar over these two periods, although significant changes were recorded in several sub-items. In particular, a EUR 187.8 billion fall in foreign purchases of euro area equity securities was offset by larger purchases of euro area debt instruments (up by EUR 77.7 billion) and smaller acquisitions of foreign securities by euro area residents (down by EUR 108.5 billion).

Data revisions

Revisions reduced the euro area non-seasonally adjusted current account in the fourth quarter of 2002 by EUR 2.1 billion, and increased the corresponding balance for the first quarter of 2003 by EUR 4.7 billion. In both cases, these changes affected mainly the goods item.

Additional information on the sharing of responsibilities regarding the compilation of the b.o.p. of the euro area and EU15

Eurostat's Euro-indicators News Releases ECB Monthly Bulletin

Annexes

In the financial account, combined direct and portfolio investment showed a net inflow of EUR 6.7 billion in May 2003, which mainly reflected net inflows in portfolio investment (EUR 7.0 billion). Both direct investment abroad by euro area residents and direct investment in the euro area by non-resident investors were limited in May 2003, and largely offset each other. Reserve assets (excluding valuation effects) decreased by EUR 1.4 billion in May 2003. The stock of the Eurosystem's reserve assets stood at EUR 323.1 billion at the end of May (   ). In parallel, net outflows in "other investment" increased from EUR 164.2 billion over the 12 months to May 2002 to EUR 240 billion over the following 12 months. This reflected in particular a higher increase in the assets of "other sectors", from EUR 39.1 billion to EUR 98.3 billion. In addition to the key items for May 2003, the present note incorporates some additional breakdowns regarding the first quarter of 2003, as well as a revised set of balance of payments statistics from October 2002 to April 2003. The main revisions of the financial account consisted of additional inflows of EUR 11.9 billion in direct investment in the fourth quarter of 2002, and further outflows of EUR 10.3 billion in portfolio investment, as well as a decrease in "other investment" outflows by EUR 9.5 billion in the first quarter of 2003. The European Central Bank and the European Commission (Eurostat) each disseminate a press release on the same day on the quarterly balance of payments for the euro area and the EU15 (   ). In line with the agreed allocation of responsibilities, the European Central Bank compiles and disseminates monthly and quarterly balance of payments statistics for the euro area, whereas the European Commission (Eurostat) focuses on quarterly and annual aggregates of the EU15. The data comply with international standards, in particular those set out in the IMF Balance of Payments Manual (5th edition). The aggregates for the euro area and the EU15 are compiled consistently on the basis of Member States' transactions with residents of countries outside the euro area and the European Union respectively. The results up to May 2003 will also be published in the August 2003 issue of the . A detailed methodological note is available on the ECB's website. The next press release on euro area balance of payments will be published on 22 August.

Table 1 Table 2 Table 3

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: Euro area current account - seasonally adjusted data. : Monthly balance of payments of the euro area - non-seasonally adjusted data. : Quarterly balance of payments of the euro area. Reproduction is permitted provided that the source is acknowledged