Euro area balance of payments (November 2006)

In November 2006 the seasonally adjusted current account of the euro area showed a deficit of EUR 2.0 billion, as deficits in current transfers and income exceeded surpluses in goods and services. In the financial account, combined direct and portfolio investment recorded net inflows, reflecting net inflows in portfolio investment which were partly offset by net outflows in direct investment. Net inflows in portfolio investment were almost evenly distributed between debt instruments and equity.

The working day and seasonally adjusted current account of the euro area recorded a deficit of EUR 2.0 billion in November 2006 (corresponding to a surplus of EUR 1.7 billion in non-seasonally adjusted terms). This reflected deficits in current transfers (EUR 9.0 billion) and income (EUR 2.5 billion) that were partly offset by surpluses in goods (EUR 7.0 billion) and services (EUR 2.4 billion).

The 12-month cumulated, working day-adjusted current account up to November 2006 recorded a deficit of EUR 26.4 billion, i.e. around 0.3% of GDP, compared with a surplus of EUR 5.6 billion a year earlier. This shift mainly resulted from a decrease in the goods surplus (by EUR 29.1 billion).

In the financial account, combined direct and portfolio investment recorded net inflows of EUR 34 billion in November 2006, reflecting net inflows in portfolio investment (EUR 45 billion) and net outflows in direct investment (EUR 12 billion).

Within direct investment, the net outflows mainly resulted from net outflows in equity capital and reinvested earnings (EUR 18 billion), while portfolio investment recorded net inflows in both equity (EUR 21 billion) and debt instruments (EUR 24 billion).

Other investment recorded net outflows of EUR 46 billion, mainly as a result of net outflows by monetary financial institutions ( MFIs) excluding the Eurosystem (EUR 42 billion).

Reserve assets increased by EUR 1 billion (excluding valuation effects). The stock of the Eurosystem’s reserve assets stood at EUR 327 billion at the end of November 2006.

In the 12-month period to November 2006, combined direct and portfolio investment showed cumulated net inflows of EUR 81 billion, compared with net inflows of EUR 16 billion a year earlier. This development resulted from both higher net inflows in portfolio investment (from EUR 196 billion to EUR 214 billion) and lower net outflows in direct investment (from EUR 180 billion to EUR 133 billion). The increase in net inflows in portfolio investment reflected mainly higher net inflows in equity. The decrease in net outflows in direct investment was predominantly caused by a higher net investment in the euro area by foreign corporations.

In addition to the balance of payments for November 2006, this press release incorporates revisions for October 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”.

The data can also be downloaded using the ECB’s Statistical Data Warehouse (SDW) at http://sdw.ecb.int.

Results up to November 2006 will also be published in the February 2007 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 21 February 2007.

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.