Euro area balance of payments in November 2013 and international investment position at the end of the third quarter of 2013

In November 2013 the seasonally adjusted current account of the euro area recorded a surplus of €23.5 billion. In the financial account, combined direct and portfolio investment recorded net inflows of €41 billion (non-seasonally adjusted).

At the end of the third quarter of 2013 the international investment position of the euro area recorded net liabilities of €1.3 trillion vis-à-vis the rest of the world (around 13% of euro area GDP). This represented a decrease in liabilities of €34 billion in comparison with the revised data for the second quarter of 2013.

Balance of payments in November 2013

The seasonally adjusted current account of the euro area recorded a surplus of €23.5 billion in November 2013 (see Table 1). This reflected surpluses for goods (€18.6 billion), services (€9.5 billion) and income (€5.0 billion), which were partially offset by a deficit for current transfers (€9.5 billion).

The seasonally adjusted 12-month cumulated current account for the period ending in November 2013 recorded a surplus of €215.8 billion (2.3% of euro area GDP; see Table 1 and Chart 1), compared with €118.0 billion (1.2% of euro area GDP) for the 12-month period up to November 2012. The rise was mainly a result of increases in the surpluses for goods (from €91.4 billion to €172.6 billion) and, to a lesser extent, services (from €87.9 billion to €104.5 billion).

In the financial account (see Table 2), combined direct and portfolio investment recorded net inflows of €41 billion in November 2013 as a result of net inflows for portfolio investment (€54 billion), which were partly offset by net outflows for direct investment (€13 billion).

The net outflows for direct investment resulted from net outflows for both other capital (mostly inter-company loans) (€10 billion) and equity capital and reinvested earnings (€2 billion).

The net inflows for portfolio investment were accounted for by net inflows for both debt instruments (€34 billion) and equity (€20 billion). The net inflows for debt instruments resulted mainly from net purchases of euro area securities by non-residents.

The financial derivatives account recorded net outflows of €5 billion.

Other investment recorded net outflows of €66 billion, reflecting net outflows for MFIs excluding the Eurosystem (€33 billion), for other sectors (€22 billion), for general government (€6 billion) and for the Eurosystem (€4 billion ).

The Eurosystem’s stock of reserve assets was €561 billion at the end of November 2013, down from €580 billion at the end of October, mainly on account of a decrease in the market price of gold. Net transactions (excluding valuation effects) were almost balanced.

In the 12 months to November 2013 combined direct and portfolio investment recorded cumulated net inflows of €21 billion, compared with net inflows of €39 billion in the 12 months to November 2012. This decrease was the result of a shift for direct investment from being close to balance to recording net outflows (€118 billion) which were only partly offset by higher net inflows for portfolio investment (up from €40 billion to €139 billion)

International investment position at the end of the third quarter of 2013

At the end of the third quarter of 2013 the international investment position of the euro area recorded net liabilities of €1.3 trillion vis-à-vis the rest of the world (close to 13% of euro area GDP; see Chart 2). This represented a decrease of €34 billion in comparison with the revised data for the second quarter of 2013 (see Table 3).

The decrease in the net liability position was due mainly to a lower net liability position for other investment (down from €155 billion to €81 billion) and a higher net position for reserve assets (up from €564 billion to €587 billion), which were partly offset by a lower net asset position for direct investment (down from €1,512 billion to €1,472 billion) and a higher net liability position for portfolio investment (up from €3,183 billion to €3,213 billion). The changes in the net positions for both direct investment and other investment were driven by transactions and “other changes” (revaluations on account of exchange rate and asset price changes, as well as other volume changes), while the changes in the net positions for portfolio investment and reserve assets were mainly a result of “other changes” (changes in the gold price in the case of reserve assets).

At the end of the third quarter of 2013 the gross external debt of the euro area amounted to €12.0 trillion (approximately 125% of euro area GDP), which represented a decrease of €244 billion in comparison with the revised data for the second quarter of 2013.

Data revisions

This press release incorporates revisions to the monthly balance of payments for the period from April 2013 to October 2013, and to the quarterly international investment position for the end of the second quarter of 2013.

The revisions to the balance of payments in October 2013 did not significantly change the previously published current account data. The revisions in the financial account in October 2013 were due mainly to revisions to net outflows in other investment (up from €23 billion to €32 billion) and to a shift from net outflows (€5billion) to inflows (€2billion) in portfolio investment.

The revisions to the balance of payments for the second quarter of 2013 were also not significant.

However, the current account surplus in the third quarter of 2013 (based on monthly data) was revised downwards (from €53.8 billion to €48.9 billion), mainly as a result of revisions in goods and current transfers. In the third quarter of 2013 there were offsetting revisions to direct investment and portfolio investment that had a moderate impact on the financial account

The revisions to the international investment position at the end of the second quarter of 2013 did not significantly change the net liability position of the euro area; however, there were some offsetting revisions to direct investment and 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 can be downloaded from the ECB’s Statistical Data Warehouse (SDW). Data up to November 2013 will also be published in the February 2014 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 18 February 2014. The next press release including the quarterly international investment position will be published on 16 April 2014.

The ECB will start publishing, at the end of 2014, the euro area balance of payments and international investment position statistics in accordance with its Guideline ECB/2011/23, which adheres to the sixth edition of the IMF’s Balance of Payments and International Investment Position Manual (BPM6). More detailed information is available on a dedicated webpage.

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