Euro area balance of payments (July 2007)

The working day and seasonally adjusted current account of the euro area recorded a surplus of EUR 1.7 billion in July 2007, reflecting surpluses in goods, services and income which were partly offset by a deficit in current transfers. In the financial account, net inflows of EUR 37 billion in combined direct and portfolio investment were mainly accounted for by net purchases of euro area equity securities by non-residents.

The working day and seasonally adjusted current account of the euro area recorded a surplus of EUR 1.7 billion in July 2007 (corresponding to a surplus of EUR 3.3 billion in non-seasonally adjusted terms). This reflected surpluses in goods (EUR 2.6 billion), services (EUR 3.0 billion) and income (EUR 1.3 billion) that were partly offset by a deficit in current transfers (EUR 5.2 billion).

The 12-month cumulated, working day-adjusted current account up to July 2007 recorded a surplus of EUR 10.0 billion (about 0.1% of euro area GDP), compared with a deficit of EUR 27.9 billion a year earlier. This shift mainly resulted from an increase in the goods surplus (of EUR 40.6 billion).

In the financial account, combined direct and portfolio investment recorded net inflows of EUR 37 billion in July 2007, reflecting net inflows in portfolio investment (EUR 34 billion) and, to a lesser extent, in direct investment (EUR 3 billion).

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

Within portfolio investment, net inflows in equity securities (EUR 51 billion) were almost entirely accounted for by net purchases of euro area equity securities by non-residents. Conversely, net outflows in debt instruments (EUR 17 billion) mainly resulted from net purchases of foreign bonds and notes by euro area residents.

Other investment recorded net inflows of EUR 28 billion, principally as a result of net inflows by general government (EUR 16 billion), monetary financial institutions ( MFIs) excluding the Eurosystem (EUR 9 billion) and other sectors (EUR 9 billion).

Reserve assets increased by EUR 3 billion (excluding valuation effects). At the end of July 2007 the stock of the Eurosystem’s reserve assets stood at EUR 329 billion.

In the 12-month period to July 2007, combined direct and portfolio investment showed cumulated net inflows of EUR 188 billion, compared with net outflows of EUR 43 billion a year earlier. This shift mainly reflected higher net inflows in portfolio investment (from EUR 80 billion to EUR 385 billion), which to a limited extent were counterbalanced by higher net outflows in direct investment (from EUR 123 billion to EUR 197 billion). The developments in portfolio investment were largely related to higher net purchases of euro area debt instruments by non-residents (from EUR 240 billion to EUR 575 billion).

In addition to the balance of payments for July 2007, this press release incorporates revisions for June 2007. Those revisions have not significantly affected the previously published data.

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, as well as the historical euro area balance of payments time series, can be downloaded using the ECB’s Statistical Data Warehouse (SDW). Results up to July 2007 will also be published in the October 2007 issues of the ECB’s Monthly Bulletin and the Statistics Pocket Book. 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 24 October 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.