Euro area balance of payments (August 2007)

The working day and seasonally adjusted current account of the euro area recorded a surplus of EUR 3.8 billion in August 2007, reflecting surpluses in goods and services, which were partly offset by the deficit in current transfers. In the financial account, combined direct and portfolio investment recorded net inflows of EUR 5 billion.

The working day and seasonally adjusted current account of the euro area recorded a surplus of EUR 3.8 billion in August 2007 (corresponding to a surplus of EUR 0.7 billion in non-seasonally adjusted terms). This reflected surpluses in goods (EUR 7.0 billion) and services (EUR 3.8 billion), which were partly offset by the deficit in current transfers (EUR 6.7 billion). The income account was balanced.

The 12-month cumulated, working day-adjusted current account up to August 2007 recorded a surplus of EUR 23.4 billion (about 0.3% of euro area GDP), compared with a deficit of EUR 18.6 billion a year earlier. This shift mainly resulted from an increase in the goods surplus (from EUR 9.3 billion to EUR 64.6 billion), which was partly offset by a shift from surplus to deficit in the income account (from EUR 12.2 billion to EUR -5.7 billion).

In the financial account, combined direct and portfolio investment recorded net inflows of EUR 5 billion in August 2007, reflecting net inflows in portfolio investment (EUR 13 billion) that were partly compensated for by net outflows in direct investment (EUR 9 billion).

The developments in direct investment resulted mainly from net outflows in equity capital and reinvested earnings (EUR 11 billion).

The portfolio investment account recorded net inflows in debt instruments (EUR 34 billion) that were partly compensated for by net outflows in equity (EUR 20 billion). The net inflows in debt instruments were largely related to net purchases of euro area bonds and notes by non-residents (EUR 22 billion) and net sales of foreign money market instruments by euro area residents (EUR 21 billion). The net outflows in equity reflected mainly net sales of euro area equity securities by non-residents (EUR 27 billion).

Other investment recorded net inflows of EUR 59 billion, mostly as a result of net inflows by monetary financial institutions ( MFIs) excluding the Eurosystem (EUR 47 billion).

Reserve assets decreased by EUR 1 billion (excluding valuation effects). At the end of August 2007 the stock of the Eurosystem’s reserve assets stood at EUR 330 billion.

In the 12-month period to August 2007, combined direct and portfolio investment showed cumulated net inflows of EUR 224 billion, compared with net outflows of EUR 25 billion a year earlier. This shift mainly reflected higher net inflows in portfolio investment (from EUR 83 billion to EUR 403 billion), which to a limited extent were counterbalanced by higher net outflows in direct investment (from EUR 108 billion to EUR 179 billion). The developments in portfolio investment were largely related to higher net purchases of debt instruments (from EUR 261 billion to EUR 594 billion) by non-residents.

In addition to the balance of payments for August 2007, this press release incorporates revisions for July 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 from the ECB’s Statistical Data Warehouse (SDW). Results up to August 2007 will also be published in the November 2007 issues of the ECB’s Monthly Bulletin and 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 22 November 2007. In addition, a separate press release on the geographical breakdown of the international investment position as at the end of 2006, including annual revisions of the euro area balance of payments and international investment position, will be published on 14 November 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.