Euro area balance of payments (Monthly developments in December 2004 and preliminary overall results for 2004)

The seasonally adjusted current account of the euro area showed a surplus of EUR 2.7 billion in December 2004 (corresponding to a EUR 6.6 billion surplus in non-seasonally adjusted terms). This reflected surpluses in goods (EUR 7.0 billion) and services (EUR 0.6 billion), which were partly offset by deficits in current transfers (EUR 3.3 billion) and income (EUR 1.6 billion).

Compared with the revised data for November 2004, the seasonally adjusted current account surplus increased by EUR 1.0 billion, as a result of a rise in the surplus for goods (by EUR 1.4 billion) and a fall in the current transfers deficit, which were not offset by the decline in the surplus for services and the rise in the income deficit.

In the financial account , combined direct and portfolio investment recorded net inflows of EUR 44.4 billion in December 2004 , reflecting net inflows in both direct investment (EUR 7.3 billion) and portfolio investment (EUR 37.1 billion).

The net inflows in direct investment were accounted for by net inflows in both equity capital and reinvested earnings (EUR 2.9 billion) and other capital (EUR 4.4 billion). In the latter category, net repayments of inter-company loans were made by both foreign affiliates of euro area companies (EUR 9.9 billion) and euro area affiliates of foreign companies (EUR 5.5 billion).

In portfolio investment , the net inflows of EUR 37.1 billion resulted from net inflows in equity securities . Specifically, foreign investors predominantly purchased euro area equity securities (EUR 28.9 billion), while euro area investors mostly sold foreign equity securities (EUR 11.2 billion). Debt instruments recorded net outflows of EUR 2.9 billion, partly due to the net sale of euro area money market instruments by non-residents.

Other investment recorded net outflows of EUR 38.5 billion, mainly as a result of net outflows by monetary financial institutions (MFIs) excluding the Eurosystem (EUR 43.0 billion).

Reserve assets decreased by EUR 1.6 billion (excluding valuation effects). The stock of the Eurosystem's reserve assets stood at EUR 279.6 billion at the end of December 2004.

In 2004 combined direct and portfolio investment showed net inflows of EUR 18.3 billion, compared with net inflows of EUR 38.3 billion in 2003. This mainly resulted from increased net outflows in direct investment (from EUR 3.4 billion to EUR 36.4 billion) that were only partly offset by higher net inflows in portfolio investment . Developments in direct investment predominantly reflected lower net investment in euro area companies by non-residents, while developments in portfolio investment primarily reflected an increase in net purchases of euro area equity securities by non-residents (from EUR 117.5 billion to EUR 127.3 billion). Net outflows in other investment decreased from EUR 73.7 billion in 2003 to EUR 32.1 billion in 2004. This mainly resulted from lower net outflows in other sectors , i.e. non-MFI corporations and households

In addition to the monthly balance of payments data for December 2004, this press release incorporates revisions for November 2004. In particular, data on the other capital category of direct investment were revised, both for assets and for liabilities.

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 “Data services”/“Latest monetary, financial markets and balance of payments statistics”. These data can also be downloaded using the ECB Statistical DataBank Browser Interface (EBI). The results up to December 2004 will also be published in the March 2005 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 23 March 2005 .

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