Euro area balance of payments (Monthly developments in April 2004)

In April 2004 the seasonally adjusted current account of the euro area recorded a surplus, largely resulting from a surplus in goods. In the financial account, net purchases abroad by residents both in direct and portfolio investment accounted for the recorded net outflows.

Current account

The seasonally adjusted current account of the euro area showed a surplus of EUR 9.0 billion in April 2004 (corresponding to a EUR 0.4 billion surplus in non-seasonally adjusted terms). This reflected surpluses in goods (EUR 13.9 billion) and services (EUR 0.2 billion) that were partly offset by deficits in income (EUR 2.2 billion) and current transfers (EUR 3.0 billion).

Compared with revised data for March 2004, the seasonally adjusted current account surplus increased by EUR 3.7 billion, mainly as a result of a rise in the goods surplus (by EUR 1.3 billion) and a decrease in the deficits in income and current transfers (by EUR 1.4 billion and by EUR 1.2 billion respectively).

 Euro area balance of payments: 12-month cumulated flows (EUR billions) —— current account balance ------ net direct investment —— net portfolio investment

The 12-month cumulated surplus of the euro area current account up to April 2004 amounted to EUR 44.3 billion, i.e. about 0.6 % of GDP, almost unchanged from a year earlier (EUR 45.3 billion – see chart). This resulted from a higher deficit for current transfers and a lower services surplus that were counterbalanced mainly by a decline in the income deficit.

Financial account

In the financial account, combined direct and portfolio investment recorded net outflows of EUR 6.3 billion in April 2004, reflecting net outflows in both direct and portfolio investment (EUR 3.3 billion and EUR 3.0 billion respectively).

The developments in direct investment were accounted for by net outflows both in equity capital (EUR 2.0 billion) and in other capital – mostly inter-company loans (EUR 1.4 billion).

In portfolio investment, net outflows of EUR 3.0 billion resulted from net outflows in equity securities (EUR 15.3 billion) that were partly counterbalanced by net inflows in debt instruments (EUR 12.4 billion). Specifically, net purchases of foreign equity securities by euro area residents (EUR 2.5 billion) were accompanied by net sales of euro area equity securities by non-residents (EUR 12.8 billion).

Other investment was balanced.

Reserve assets increased by EUR 2.7 billion (excluding valuation effects). The stock of the Eurosystem’s reserve assets stood at EUR 302.8 billion at the end of April 2004 (http://www.ecb.europa.eu/stats/external/reserves/templates/html/200404ecb.en.html).

In the 12-month period up to April 2004, combined direct and portfolio investment recorded cumulated net outflows of EUR 51.0 billion, compared with net inflows of EUR 153.4 billion a year earlier. This resulted from an increase in net direct investment outflows (from EUR 8.8 billion to EUR 43.3 billion), because the inflows from non-residents decreased more than the outflows by residents abroad, and from a switch in net portfolio investment from net inflows (EUR 162.2 billion) to net outflows (EUR 7.7 billion). Developments in portfolio investment mainly stemmed from a reversal of the net flows in money market instruments (from inflows of EUR 60.2 billion to outflows of EUR 56.6 billion) and a decline in the net inflows of equity securities (from EUR 58.5 billion to EUR 1.5 billion) as net purchases by residents increased more than, and almost offset, those by non-residents.

Data revisions

In addition to the monthly balance of payments data for April 2004, this press release incorporates revisions for March 2004. Revisions in the financial account mostly concerned debt instruments, whose net inflows were revised from EUR 4.8 billion to EUR 2.6 billion.

Additional information on the euro area balance of payments and international investment position

A complete set of updated euro area balance of payments and international investment position statistics is available on the ECB’s website in the “Statistics” section under the heading “Latest monetary, financial markets and balance of payments statistics (includes release schedules)”. The results up to April 2004 will also be published in the July 2004 issue of the ECB’s Monthly Bulletin. 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 26 July 2004.

Annexes

Table 1: Euro area current account – seasonally adjusted data.

Table 2: Monthly balance of payments of the euro area – non-seasonally adjusted data.