Monthly developments in January 2004 and revisions for December 2003

Seasonally adjusted current account in surplus in January

Compared with the revised data for December 2003, the seasonally adjusted current account surplus decreased by EUR 0.7 billion in January 2004. This was the result of an increase in the deficits in income (by EUR 1.2 billion) and in current transfers (by EUR 2.7 billion), and a reduction in the services surplus (by EUR 0.9 billion), which were partly counterbalanced by an increase in the goods surplus (by EUR 4.1 billion).  Euro area balance of payments: 12-month cumulated flows (EUR billions)

The seasonally adjusted current account of the euro area showed a surplus of EUR 2.5 billion in January 2004 (corresponding to a deficit of EUR 5.3 billion in non-seasonally adjusted terms). This reflected surpluses in goods (EUR 12.2 billion) and to a lesser extent services (EUR 1.2 billion), which were partly offset by deficits in income (EUR 5.3 billion) and current transfers (EUR 5.6 billion). The 12-month cumulated surplus of the euro area current account up to January 2004 amounted to EUR 28.9 billion, i.e. around 0.4% of GDP, compared with EUR 61.5 billion a year earlier. This reduction resulted from a lower surplus for goods (mainly reflecting lower exports), together with higher deficits in income and in current transfers. These developments were partly offset by a higher services surplus.

—— current account balance ------ net direct investment —— net portfolio investment

             

Net outflows in direct and portfolio investment in January

The developments in direct investment mainly reflected net outflows in other capital (mostly inter-company loans), amounting to EUR 13.7 billion. In particular, non-residents reduced inter-company loans granted to affiliates in the euro area by EUR 9.2 billion. Other investment recorded net inflows of EUR 1.7 billion in January 2004; net inflows in euro area MFIs' short-term transactions were largely offset by net outflows involving general government, other non-MFI sectors and euro area MFIs' long-term transactions. Template on international reserves and foreign currency liquidity In the 12-month period up to January 2004, combined direct and portfolio investment showed net outflows of EUR 28.3 billion, compared with net inflows of EUR 95.3 billion a year earlier. This development largely reflected the decline in portfolio investment net inflows over this period, driven in particular by a switch in money market instruments from net inflows (EUR 28.8 billion) to net outflows (EUR 44.4 billion), and a decrease in net inflows in equity securities. In parallel, net outflows in direct investment decreased from EUR 45.2 billion to EUR 28.2 billion, mainly because investment in equity capital abroad by euro area residents almost halved (to EUR 88.7 billion). This was only partly offset by the drying-up of inter-company loans extended by non-resident enterprises to their euro area affiliates.

In the financial account, combined direct and portfolio investment showed net outflows of EUR 22.4 billion in January 2004, reflecting net outflows in both direct investment (EUR 11.0 billion) and portfolio investment (EUR 11.5 billion). Net outflows in portfolio investment largely resulted from the simultaneous net acquisition of non-euro area equity securities by residents (EUR 14.2 billion) and net disposal of euro area equity securities by non-residents (EUR 1.4 billion). By contrast, debt instruments showed a net inflow of EUR 4.2 billion. Reserve assets increased by EUR 3.2 billion in January 2004 (excluding valuation effects). The stock of the Eurosystem's reserve assets stood at EUR 309.7 billion at the end of January 2004 (   ).

Data revisions

Additional information on the euro area balance of payments

ECB Monthly Bulletin

Annexes

In addition to the monthly data for January 2004, this press release incorporates a revised set of balance of payments statistics for December 2003. The revisions had a minor impact on the net figures. The results up to January 2004 will also be published in the April 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 27 April 2004.

Table 1 Table 2

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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