Euro area balance of payments (December 2007 and preliminary overall results for 2007)

In December 2007 the working day and seasonally adjusted current account of the euro area showed a deficit of EUR 10.3 billion. In the financial account, combined direct and portfolio investment showed net outflows of EUR 19 billion.

In 2007 as a whole, the working day-adjusted surplus on the euro area current account amounted to EUR 15.0 billion (about 0.2% of GDP), compared with a deficit of EUR 13.6 billion in 2006. Combined direct and portfolio investment recorded net inflows of EUR 124 billion in 2007, down from EUR 140 billion in 2006, mainly as a result of lower net purchases of euro area bonds and notes by residents outside the euro area.

The working day and seasonally adjusted current account of the euro area recorded a deficit of EUR 10.3 billion in December 2007 (corresponding to a surplus of EUR 1.9 billion in non-seasonally adjusted terms). This reflected deficits in current transfers (EUR 8.2 billion), goods (EUR 3.2 billion) and income (EUR 1.4 billion) that were partly compensated for by a surplus in services (EUR 2.6 billion).

In 2007 as a whole, the working day-adjusted surplus on the euro area current account amounted to EUR 15.0 billion, i.e. around 0.2% of GDP. This implied a shift of about 0.4% of GDP from the deficit in 2006 (EUR 13.6 billion). This development was due to an increase of the surpluses in goods (from EUR 22.3 billion to EUR 59.6 billion) and in services (from EUR 35.3 billion to EUR 42.5 billion), which were only partly offset by a shift from a surplus to a deficit in the income account and an increase in the current transfers deficit.

In the financial account, combined direct and portfolio investment recorded net outflows of EUR 19 billion in December 2007, reflecting net outflows in direct investment (EUR 21 billion) and net inflows in portfolio investment (EUR 2 billion).

The net outflows in direct investment resulted mainly from net outflows in equity capital and reinvested earnings (EUR 13 billion). Portfolio investment recorded net inflows in bonds and notes (EUR 12 billion), which were only partly compensated for by net outflows in money market instruments (EUR 10 billion).

Financial derivatives recorded net outflows of EUR 13 billion.

Other investment recorded net inflows of EUR 4 billion, as a result of net inflows of both the Eurosystem (EUR 15 billion) and other sectors (EUR 3 billion), which were partly offset by net outflows of general government (EUR 9 billion) and Other MFIs (EUR 6 billion). The net inflows of the Eurosystem mainly reflected the implementation of its measures to address elevated pressures in short-term funding markets (see ECB press release of 12 December 2007).

Reserve assets decreased by EUR 5 billion (excluding valuation effects). The stock of the Eurosystem’s reserve assets stood at EUR 347 billion at the end of December 2007.

In 2007 as a whole, combined direct and portfolio investment showed net inflows of EUR 124 billion, compared with net inflows of EUR 140 billion in 2006. This change largely resulted from lower net inflows in portfolio investment (from EUR 276 billion to EUR 232 billion), which in turn reflected mainly lower net purchases of euro area bonds and notes by non-resident investors.

In addition to the balance of payments for December 2007, this press release incorporates revisions for November 2007. 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, 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 December 2007 will also be published in the March 2008 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 26 March 2008.

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.