Euro area balance of payments (September 2006)

In September 2006 the seasonally adjusted current account of the euro area was close to balance, as surpluses in goods, services and income almost offset the deficit in current transfers. In the financial account, combined direct and portfolio investment recorded net inflows of EUR 21 billion, predominantly reflecting net purchases of euro area portfolio securities by non-residents.

The working day and seasonally adjusted current account of the euro area was close to balance in September 2006 (it was also close to balance in non-seasonally adjusted terms). This reflected surpluses in goods (EUR 1.7 billion), services (EUR 2.2 billion) and income (EUR 2.7 billion) that were almost offset by the deficit in current transfers (EUR 6.8 billion).

The 12-month cumulated current account up to September 2006 recorded a deficit of EUR 28.8 billion, i.e. around 0.3% of GDP, compared with a surplus of EUR 23.6 billion a year earlier. This shift mainly resulted from a decrease of EUR 50.4 billion in the goods surplus, as the small increases in the deficits for income and current transfers were almost offset by the increase in the surplus for services.

In the financial account, combined direct and portfolio investment recorded net inflows of EUR 21 billion in September 2006, reflecting net inflows in portfolio investment (EUR 41 billion) and net outflows in direct investment (EUR 20 billion).

Within direct investment, the net outflows predominantly resulted from net outflows in equity capital and reinvested earnings (EUR 20 billion).

The portfolio investment account recorded net inflows in both equity (EUR 20 billion) and debt instruments (EUR 20 billion), because net purchases of euro area securities by non-residents exceeded net purchases of foreign securities by euro area residents.

Other investment recorded net inflows of EUR 19 billion, mainly as a result of net inflows in general government (EUR 9 billion) and other sectors, i.e. non-monetary financial institutions, non-financial corporations and households (EUR 10 billion).

Reserve assets increased by EUR 1 billion (excluding valuation effects). The stock of the Eurosystem’s reserve assets stood at EUR 325 billion at the end of September 2006.

In the 12-month period to September 2006, combined direct and portfolio investment showed cumulated net outflows of EUR 18 billion, compared with net inflows of EUR 44 billion a year earlier. This development resulted from lower net inflows in portfolio investment (from EUR 232 billion to EUR 99 billion) that were only partly counterbalanced by lower net outflows in direct investment (from EUR 188 billion to EUR 117 billion). The decrease in net inflows in portfolio investment reflected declining net inflows in equity and a shift from net inflows to net outflows in debt securities. The net outflows in direct investment mainly decreased on account of higher net investment in the euro area by foreign corporations.

In addition to the balance of payments for September 2006, this press release incorporates revisions for August 2006. These revisions have not significantly altered the previously published statistics.

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 headings “Data services”/“Latest monetary, financial markets and balance of payments statistics”. These data can also be downloaded using the ECB’s Statistical Data Warehouse (SDW). The results up to September 2006 will also be published in the December 2006 issue of the ECB’s Monthly Bulletin. A detailed methodological note is available on the ECB’s website. The next press release on the euro area monthly balance of payments will be published on 22 December 2006.

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

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