Euro area balance of payments (March 2008)

In March 2008 the working day and seasonally adjusted current account of the euro area showed a deficit of EUR 15.3 billion. In the financial account, combined direct and portfolio investment showed net outflows of EUR 18 billion.

The working day and seasonally adjusted current account of the euro area recorded a deficit of EUR 15.3 billion in March 2008 (corresponding to a deficit of EUR 7.8 billion in non-adjusted terms). This reflected deficits in current transfers (EUR 10.8 billion), income (EUR 4.2 billion) and goods (EUR 3.9 billion), which were only partly compensated for by a surplus in services (EUR 3.6 billion).

The 12-month cumulated, working day-adjusted current account up to March 2008 was close to balance, compared with a surplus of EUR 6.5 billion a year earlier. This change resulted mainly from a shift in the income account from a surplus (EUR 7.9 billion) to a deficit (EUR 3.8 billion) and an increase in the deficit on current transfers (from EUR 78.9 billion to EUR 90.1 billion), which were only partly offset by increases in the surpluses in goods (from EUR 32.3 billion to EUR 42.3 billion) and services (from EUR 45.1 billion to EUR 52.1 billion).

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Financial account

In the financial account, combined direct and portfolio investment recorded net outflows of EUR 18 billion in March 2008, reflecting net outflows in direct investment (EUR 19 billion) and net inflows in portfolio investment (EUR 1 billion).

The net outflows in direct investment resulted from net outflows both in equity capital and reinvested earnings (EUR 10 billion) and in other capital, mostly inter-company loans (EUR 9 billion).

Portfolio investment recorded net inflows in equity (EUR 5 billion), which were partly counterbalanced by net outflows in debt instruments (EUR 4 billion).

Financial derivatives recorded net inflows of EUR 7 billion.

Other investment recorded net inflows of EUR 25 billion, mainly as a result of net inflows in the Eurosystem (EUR 13 billion), MFIs excluding the Eurosystem (EUR 7 billion) and other sectors (EUR 4 billion).

Reserve assets increased by EUR 3 billion (excluding valuation effects). The stock of the Eurosystem’s reserve assets stood at EUR 356 billion at the end of March 2008.

In the 12-month period to March 2008, combined direct and portfolio investment showed cumulated net inflows of EUR 32 billion, compared with net inflows of EUR 246 billion a year earlier. This development largely resulted from a decrease in net inflows in portfolio investment (from EUR 376 billion to EUR 181 billion), which, in turn, mainly reflected lower net purchases of euro area bonds and notes by non-resident investors.

In addition to the balance of payments for March 2008, this press release incorporates revisions for February 2008. Revisions in the financial account concerned portfolio investment, where net inflows were revised downwards from EUR 35 billion to EUR 19 billion, other investment, where net outflows were revised downwards from EUR 38 billion to EUR 31 billion, and direct investment, where net outflows were revised upwards from EUR 14 billion to EUR 20 billion.

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 March 2008 will also be published in the June 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 27 June 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.