Euro area balance of payments (August 2009)

In August 2009 the working day and seasonally adjusted current account of the euro area recorded a deficit of EUR 1.3 billion. In the financial account, combined direct and portfolio investment recorded net inflows of EUR 57 billion (non-seasonally adjusted).

The working day and seasonally adjusted current account of the euro area recorded a deficit of EUR 1.3 billion in August 2009 (corresponding to a deficit of EUR 5.0 billion in non-adjusted terms). This reflected deficits in current transfers (EUR 7.2 billion) and income (EUR 1.8 billion), which were partly offset by surpluses in goods (EUR 6.0 billion) and services (EUR 1.8 billion).

The 12-month cumulated, working day-adjusted current account recorded a deficit of EUR 106.5 billion (around 1.2% of euro area GDP) in August 2009, compared with a deficit of EUR 56.1 billion a year earlier. The widening current account deficit mainly resulted from an increase in the income deficit (from EUR 19.6 billion to EUR 52.9 billion) and a decrease in the surplus in services (from EUR 50.8 billion to EUR 25.0 billion).

In the non-seasonally adjusted financial account, combined direct and portfolio investment recorded net inflows in August 2009 (EUR 57 billion), as net inflows were recorded both in portfolio investment (EUR 53 billion) and in direct investment (EUR 4 billion).

The net inflows in direct investment resulted from net inflows in equity capital and reinvested earnings (EUR 1 billion) and in other capital (mostly inter-company loans) (EUR 3 billion).

The net inflows in portfolio investment were accounted for by net inflows in equity (EUR 41 billion), bonds and notes (EUR 1 billion) and money market instruments (EUR 11 billion). The developments in equity were predominantly accounted for by net purchases of euro area securities by non-residents.

Financial derivatives recorded net outflows of EUR 6 billion.

Other investment recorded net outflows of EUR 55 billion, mainly as a result of net outflows for other sectors (EUR 32 billion), the Eurosystem (EUR 10 billion) and MFIs excluding the Eurosystem (EUR 12 billion).

Although there were virtually no net transactions in reserve assets in August 2009, the Eurosystem’s stock of reserve assets increased from EUR 387 billion at the end of July 2009 to EUR 428 billion at the end of August 2009. That increase resulted from the allocation by the IMF of special drawing rights to euro area countries.

In the 12-month period to August 2009, combined direct and portfolio investment recorded cumulated net inflows of EUR 424 billion, compared with net outflows of EUR 29 billion in the preceding 12-month period. This shift mainly resulted from a substantial rise in net inflows in portfolio investment (from EUR 127 billion to EUR 572 billion), largely reflecting a shift from net outflows (of EUR 63 billion) to net inflows (of EUR 309 billion) in money market instruments.

In addition to the balance of payments for August 2009, this press release incorporates revisions for July 2009. These revisions have not significantly altered the previously published figures.

The compilation method for three items in the b.o.p. financial account under “other sectors” (namely sectors other than the Eurosystem, other monetary financial institutions and general government) will be modified as from the press release to be published on 2 November 2009. In particular, the new method involves grossing-up procedures in the compilation of other investment assets in loans and in deposits and of portfolio investment equity liabilities. The new results entail a considerable reduction of the statistical discrepancies within the euro area balance of payments from 2004 onwards. More information will be provided with the press release of 2 November 2009.

A complete set of updated euro area balance of payments and international investment position statistics is available in the “Statistics” section of the ECB’s website under the headings “Data services”/“Latest monetary, financial markets and balance of payments statistics”. These data, as well as historical euro area balance of payments time series, can be downloaded from the ECB’s Statistical Data Warehouse (SDW). Data up to August 2009 will also be published in the November 2009 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 18 November 2009.

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