Euro area balance of payments in August 2012 
and international investment position 
at the end of the second quarter of 2012

In August 2012 the seasonally adjusted current account of the euro area recorded a surplus of €8.8 billion. In the financial account, combined direct and portfolio investment recorded net outflows of €3 billion (non-seasonally adjusted).

At the end of the second quarter of 2012 the international investment position of the euro area recorded net liabilities of €836 billion vis-à-vis the rest of the world (approximately 9% of euro area GDP). This represented a decrease of €176 billion in net liabilities in comparison with the revised data for the first quarter of 2012.

Balance of payments in August 2012

The seasonally adjusted current account of the euro area recorded a surplus of €8.8 billion in August 2012 (see Table 1). This reflected surpluses for goods (€10.2 billion), services (€7.0 billion) and income (€3.2 billion), which were partially offset by a deficit for current transfers (€11.7 billion).

The 12-month cumulated seasonally adjusted current account recorded a surplus of €72.4 billion in August 2012 (0.8% of euro area GDP; see Table 1 and Chart 1), compared with a deficit of €21.6 billion a year earlier. This change resulted from goods shifting from deficit (€2.4 billion) to surplus (€65.2 billion) and from increases in the surpluses for services (from €54.4 billion to €82.7 billion) and income (from €27.0 billion to €32.9 billion), which were partly counterbalanced by an increase in the deficit for current transfers (from €100.6 billion to €108.5 billion).

In the financial account (see Table 2), combined direct and portfolio investment recorded net outflows of €3 billion in August 2012, as a result of net outflows in direct investment (€11 billion) that were only partly offset by net inflows in portfolio investment (€8 billion).

The net outflows for direct investment resulted from net outflows in both other capital (mostly inter-company loans) (€7 billion) and equity capital and reinvested earnings (€5 billion). The net inflows for portfolio investment were accounted for by net inflows for equity (€13 billion), which were partly offset by net outflows for debt instruments (€5 billion).

The financial derivatives account was close to balance.

Other investment recorded net outflows (€7 billion), reflecting net outflows for MFIs excluding the Eurosystem (€10 billion) and general government (€1 billion), which were partly offset by net inflows for other sectors (€3 billion) and the Eurosystem (€1 billion).

The Eurosystem’s stock of reserve assets was €716 billion at the end of August 2012, down from €725 billion at the end of July 2012, mainly on account of valuation effects. Transactions in August 2012 contributed to an increase of €2 billion in the overall position.

In the 12-month period to August 2012 combined direct and portfolio investment recorded cumulated net outflows of €45 billion, compared with net inflows of €282 billion in the preceding 12-month period. This shift was the result of lower net inflows for portfolio investment (down from €349 billion to €62 billion) and higher net outflows for direct investment (up from €67 billion to €107 billion).

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

At the end of the second quarter of 2012 the international investment position of the euro area recorded net liabilities of €836 billion vis-à-vis the rest of the world (approximately 9% of euro area GDP; see Chart 2). This represented a decrease in net liabilities of €176 billion in comparison with the revised data for the first quarter of 2012 (see Table 3).

The decrease in the net liability position was mainly the result of a lower net liability position for other investment (down from €377 billion to €243 billion) and, to a lesser extent, a higher net asset position in reserve assets (up from € 671 billion to € 702 billion) and direct investment (up from €1,482 billion to €1,499 billion). The decrease primarily reflected positive “other changes” amounting to €152 billion. These were mainly related to portfolio investment and other investment (predominantly revaluations on account of changes in exchange rates and asset prices).

At the end of the second quarter of 2012 the gross external debt of the euro area amounted to €11.2 trillion (approximately 119% of euro area GDP), which represented an increase of €145 billion in relation to the revised data for the first quarter of 2012.

Data revisions

This press release incorporates revisions to the monthly balance of payments for the period from January 2012 to July 2012, and to the quarterly international investment position for the end of the first quarter of 2012.

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

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

The revisions to the international investment position at the end of the first quarter of 2012 did not significantly change the previously published net liability position.

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 August 2012 will also be published in the November 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 16 November 2012. The next press release including the quarterly international investment position will be published on 24 January 2013. In addition, an annual press release on the international investment position including its geographical breakdown at the end of 2011 will be published on 29 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