Euro area balance of payments (September 2005)

In September 2005 the seasonally adjusted current account of the euro area recorded a deficit of EUR 4.5 billion as the deficits in current transfers and income exceeded the surpluses in goods and services. In the financial account, combined direct and portfolio investment recorded net inflows of EUR 16 billion. This predominantly reflected net purchases of euro area debt instruments by non-residents.

The seasonally adjusted current account of the euro area showed a deficit of EUR 4.5 billion in September 2005 (corresponding to a deficit of EUR 4.8 billion in non-seasonally adjusted terms). This reflected deficits in current transfers (EUR 6.2 billion) and income (EUR 4.9 billion) that were partly offset by surpluses in goods (EUR 4.7 billion) and services (EUR 1.9 billion).

The 12-month cumulated surplus of the euro area current account up to September 2005 amounted to EUR 2.1 billion, i.e. less than 0.1% of GDP, as compared with EUR 44.9 billion a year earlier (around 0.6% of GDP). This decrease mainly resulted from a decline of EUR 42.6 billion in the goods surplus, reflecting an increase in the value of imports that exceeded that of exports.

In the financial account, combined direct and portfolio investment recorded net inflows of EUR 16 billion in September 2005, reflecting net inflows in both portfolio investment (EUR 14 billion) and direct investment (EUR 2 billion).

In direct investment, net inflows of EUR 7 billion in other capital (mostly inter-company loans) were partly offset by net outflows of EUR 5 billion in equity capital and reinvested earnings.

In portfolio investment, there were net inflows both in equity securities (EUR 6 billion) and in debt instruments (EUR 8 billion). Net purchases of euro area debt securities by non-residents (EUR 46 billion) more than offset likewise significant net purchases of foreign debt securities by euro area residents (EUR 38 billion).

Other investment recorded net inflows of EUR 9 billion, mainly as a result of the net inflows registered by monetary financial institutions (MFIs) excluding the Eurosystem (EUR 11 billion).

Reserve assets were virtually unchanged (excluding valuation effects). The stock of the Eurosystem’s reserve assets stood at EUR 311.6 billion at the end of September 2005.

In the 12-month period up to September 2005, combined direct and portfolio investment recorded cumulated net inflows of EUR 65 billion, as compared with net inflows of EUR 32 billion a year earlier. This mainly resulted from an increase of EUR 146 billion in net inflows in portfolio investment (from EUR 65 billion to EUR 211 billion) that was largely due to increased net purchases of euro area equities by non-residents. Over the same period, net outflows in direct investment increased by EUR 113 billion (from EUR 33 billion to EUR 146 billion), mainly on account of higher investment abroad by euro area residents.

In addition to the monthly balance of payments data for September 2005, this press release incorporates some revisions to August 2005 data. These revisions have not significantly altered the data earlier published.

In addition, the seasonally adjusted current account time series from 1999 up to August 2005 have been revised, with a particular effect on the seasonal pattern of income and current transfers in the period from 1999 to 2003. An explanatory note regarding the monthly seasonal adjustment of euro area balance of payments statistics is available on the ECB’s website.

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”. The results up to September 2005 will also be published in the December 2005 issue of the ECB’s Monthly Bulletin. A detailed methodological note [pdf] is available on the ECB’s website. The next press release on the euro area monthly balance of payments will be published on 23 December 2005.

Table 1: Current account of the euro area – seasonally adjusted data.

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