Euro area balance of payments in May 2012 
and international investment position 
at the end of the first quarter of 2012

In May 2012 the seasonally adjusted current account of the euro area recorded a surplus of €10.9 billion. In the financial account, combined direct and portfolio investment recorded net inflows of €39 billion (non-seasonally adjusted).

At the end of the first quarter of 2012 the international investment position of the euro area recorded net liabilities of €1.0 trillion vis-à-vis the rest of the world (approximately 11% of euro area GDP). This represented a decrease of €45 billion in comparison with the revised data for the end of 2011.

Balance of payments in May 2012

The seasonally adjusted current account of the euro area recorded a surplus of €10.9 billion in May 2012 (see Table 1). This reflected surpluses for goods (€8.9 billion), services (€6.0 billion) and income (€5.2 billion), which were partially offset by a deficit for current transfers (€9.2 billion).

The 12-month cumulated seasonally adjusted current account recorded a surplus of €36.3 billion in May 2012 (0.4% of euro area GDP; see Table 1 and Chart 1), compared with a deficit of €17.0 billion a year earlier. This shift resulted from increases in the surpluses for goods (from €0.5 billion to €36.6 billion), services (from €52.6 billion to €73.8 billion) and income (from €29.7 billion to €33.2 billion), which were partially counterbalanced by an increase in the deficit for current transfers (from €99.9 billion to €107.4 billion).

In the financial account (see Table 2), combined direct and portfolio investment recorded net inflows of €39 billion in May 2012, as a result of net inflows for both direct investment (€11 billion) and portfolio investment (€28 billion). The net inflows for direct investment mostly resulted from net inflows in equity capital and reinvested earnings (€8 billion). The net inflows for portfolio investment were accounted for by net inflows for debt instruments (€25 billion), and to a more limited extent by net inflows in equity (€3 billion).

The financial derivatives account recorded net outflows of €6 billion.

Other investment recorded net outflows (€35 billion), reflecting net outflows for MFIs excluding the Eurosystem (€49 billion), other sectors (€27 billion) and general government (€2 billion), which were partly offset by net inflows for the Eurosystem (€42 billion).

The Eurosystem’s stock of reserve assets was €696 billion at the end of May 2012, up from €680 billion at the end of April 2012; the net transactions recorded in the balance of payments contributed €2 billion to the increase in the stock.

In the 12-month period to May 2012 combined direct and portfolio investment recorded cumulated net outflows of €3 billion, compared with net inflows of €128 billion in the preceding 12-month period. This shift was the result of lower net inflows for portfolio investment (down from €234 billion to €72 billion), which were partly offset by lower net outflows for direct investment (down from €105 billion to €75 billion).

International investment position at the end of the first quarter of 2012

At the end of the first quarter of 2012 the international investment position of the euro area recorded net liabilities of €1.0 trillion vis-à-vis the rest of the world (approximately 11% of euro area GDP; see Chart 2). This represented a decrease of €45 billion in comparison with the revised data for the end of 2011 (see Table 3).

The decrease in the net liability position was mainly the result of a higher net asset position for direct investment (up from €1,295 billion to €1,351 billion) and a lower net liability position for portfolio investment (down from €2,918 billion to €2,799 billion), which were partly offset by a higher net liability position for other investment (up from €110 billion to €243 billion). While the change in the net position for direct investment mainly reflected “other changes” (predominantly revaluations on account of changes in exchange rates and asset prices), the changes in the net portfolio investment and other investment positions were more evenly distributed between transactions and “other changes”.

At the end of the first quarter of 2012 the gross external debt of the euro area amounted to €11.4 trillion (approximately 121% of euro area GDP), which represented an increase of €72 billion in relation to the revised data for the end of 2011.

Data revisions

This press release incorporates revisions to the monthly balance of payments for the period from October 2011 to April 2012, and to the quarterly international investment position at the end of 2011.

The revisions to the balance of payments in April 2012 did not significantly change the previously published data.

The revisions to the current account balances for the last quarter of 2011 and for the first quarter of 2012 were not significant; the revisions to the financial account for the first quarter of 2012 mainly affected direct investment, portfolio investment and other investment.

The revisions to the international investment position at the end of 2011 led to a lower net liability position (down from €1,136 billion to €1,085 billion) mostly on account of revisions to other investment.

Additional information on the euro area balance of payments and international investment position

In this press release, the seasonally adjusted current account refers to working day and seasonally adjusted data. Data for the financial account are not working day or seasonally adjusted.

In line with the agreed allocation of responsibilities, the European Central Bank compiles and disseminates monthly and quarterly balance of payments statistics for the euro area, whereas the European Commission (Eurostat; see news releases for “Euro-indicators”) focuses on quarterly and annual aggregates for the European Union. These data comply with international standards, particularly those set out in the IMF’s Balance of Payments Manual (fifth edition). The aggregates for the euro area and the European Union are compiled consistently on the basis of transactions and positions vis-à-vis residents of countries outside the euro area and the European Union respectively.

A complete set of updated euro area balance of payments statistics (including a quarterly geographical breakdown for the main counterparts) 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 May 2012 will also be published in the August 2012 issues of the ECB’s Monthly Bulletin and Statistics Pocket Book. Detailed methodological notes are available on the ECB’s website. The next press release on the euro area monthly balance of payments will be published on 17 August 2012. The next press release including the quarterly international investment position will be published on 19 October 2012.

Annexes

Table 1: Current account of the euro area

Table 2: Monthly balance of payments of the euro area

Table 3: Quarterly international investment position of the euro area