Monthly developments in December 2003 and preliminary overall results for 2003

Seasonally adjusted current account in surplus in December

Compared with the revised data for November 2003, the seasonally adjusted current account surplus increased by EUR 0.4 billion in December. This was the result of both an increase in the surplus of goods (by EUR 0.7 billion) and a reduction in the deficit of current transfers (by EUR 2.4 billion), which were partly counterbalanced by an increase in the income deficit (by EUR 2.7 billion). The surplus for services remained unchanged. Euro area balance of payments: 12-month cumulated flows (Euro 12; EUR billions) ------ net direct investment –– net portfolio investment

The seasonally adjusted current account of the euro area showed a surplus of EUR 2.5 billion in December 2003 (EUR 5.0 billion in non-seasonally adjusted terms). This reflected surpluses in both goods (EUR 8.2 billion) and services (EUR 1.7 billion), which were partly offset by deficits in income (EUR 4.1 billion) and current transfers (EUR 3.4 billion). For 2003 as a whole, the surplus of the euro area current account amounted to EUR 28.1 billion, i.e. around 0.4% of GDP, compared with EUR 67.1 billion in 2002. This reduction resulted from a lower surplus for goods (mainly reflecting lower exports), together with higher deficits for income and current transfers. These developments were partly compensated by a higher services surplus. ––– current account balance             

Net outflows in direct and portfolio investment in December

The developments in portfolio investment mainly reflected net outflows in debt instruments (EUR 16.9 billion), which were only partly offset by net inflows in equity portfolio investment (EUR 8.4 billion). The net outflows in debt instruments were mostly related to net sales of euro area money market instruments by non-resident investors (EUR 22.9 billion). Other investment recorded net inflows of EUR 12.6 billion in December 2003, mainly as a result of a net inflow in the "other sectors" of EUR 11.3 billion. The latter resulted from both a reduction in assets abroad (mainly loans and deposits) and an increase in loans received by the units in these "other sectors". Template on international reserves and foreign currency liquidity For the year 2003 as a whole, combined direct and portfolio investment showed net outflows of EUR 9.3 billion, compared with net inflows of EUR 61.9 billion in 2002. This development largely reflected lower net inflows in portfolio investment over this period, driven in particular by a switch in money market instruments from net inflows in 2002 (EUR 14.1 billion) to net outflows in 2003 (EUR 50.9 billion). In parallel, net outflows in direct investment decreased from EUR 41.5 billion in 2002 to EUR 21.2 billion in 2003, mainly due to a decrease of investment in equity capital abroad by euro area residents (by EUR 60.3 billion). This was only partly offset by decreasing investment in euro area "other capital" by non-residents.

Data revisions

Additional information on the euro area balance of payments

ECB Monthly Bulletin

Annexes

In the financial account, combined direct and portfolio investment showed net outflows of EUR 10.4 billion in December 2003, reflecting net outflows in both portfolio investment (EUR 8.6 billion) and, to a lesser extent, direct investment (EUR 1.8 billion). In direct investment, both the acquisition of equity capital abroad by euro area residents (EUR 15.2 billion) and the acquisition of euro area equity capital by non-resident investors (EUR 14.7 billion) were higher than in previous months, and largely offset each other. Other capital (mostly inter-company loans) showed a net outflow of EUR 1.3 billion. Reserve assets decreased by EUR 7.3 billion in December 2003 (excluding valuation effects). The stock of the Eurosystem's reserve assets stood at EUR 307.0 billion at the end of December 2003 (   ). Net outflows in "other investment" decreased from EUR 146.6 billion in 2002 to EUR 78.5 billion in 2003. This was mainly the result of a shift in short-term borrowing and deposits received from non-residents by the euro area MFI sector, which increased by EUR 65.4 billion in 2003 after having decreased by EUR 24.1 billion in 2002. In addition to the monthly data for December 2003, this press release incorporates a revised set of balance of payments statistics for November 2003. The main amendment consisted of a EUR 5.6 billion decrease in net inflows of direct investment. The results up to December 2003 will also be published in the March 2004 issue of the . A detailed methodological note is available on the ECB's website. The next press release on euro area balance of payments is scheduled for publication on 24 March 2004.

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