Monthly developments in November 1999

ECB Monthly Bulletin The current account surplus of the euro area declined to EUR 2.4 billion in November 1999 (from ECU 4.4 billion in the corresponding month of 1998). As in previous months, the decline was due primarily to a fall in the goods surplus (to EUR 8.3 billion, from ECU 10.2 billion in November 1998) as changes in the balances of services and income broadly offset each other, while the deficit on current transfers remained virtually unchanged. Over the first eleven months of 1999 the current account surplus was EUR 40.6 billion, EUR 13.6 billion lower than in the same period in 1998, due primarily to the shrinking goods surplus. However, the services balance also fell during 1999, reaching a deficit of EUR 6 billion for the period from January to November, compared with a small deficit of ECU 0.9 billion in the corresponding period of 1998. By contrast, smaller deficits were recorded for both the income and current transfers accounts for the first eleven months of 1999, compared with the same period a year earlier. Portfolio investment reported substantial net inflows in November (EUR 18.0 billion), while a net outflow was recorded in October (EUR 14.4 billion). The main determinant of the swing from net outflows to net inflows was the strong demand for euro area debt instruments by foreign investors in November (EUR 34.3 billion). Over the first eleven months of 1999 net portfolio investment outflows were substantially lower than in the same period of 1998 (EUR 28.3 billion, as compared with ECU 73.2 billion). This was due to a swing in debt instruments from net outflows in 1998 (ECU 73.8 billion) to net inflows in 1999 (EUR 24.2 billion) to which both lower investment of euro area residents in foreign debt securities and stronger demand of foreign investors for euro area debt instruments contributed. By contrast, net outflows of equity instruments reached EUR 52.5 billion in the first eleven months of 1999, compared with a net inflow of ECU 0.5 billion in the same period of 1998. Elsewhere in the financial account, net inflows in financial derivatives reached EUR 1.6 billion, and other investment showed net outflows of EUR 3.2 billion in November. Reserve assets decreased by EUR 0.6 billion in November. Annex 1 to this press release (  pdf 64 kB,

In addition to the balance of payments (b.o.p.) monthly key items for November, this release incorporates a revised and more detailed set of b.o.p. statistics for the third quarter of 1999. The quarterly statistics for the third quarter of 1999 include a breakdown of the income item of the current account and additional information on sectors and instruments for the b.o.p. financial account. The full set of revised data will be shown in the February issue of the . Exports of goods continued to grow strongly in November, rising by EUR 9.2 billion, as compared with the same month in 1998 (from ECU 64.4 billion to EUR 73.6 billion), as a result of both expanding foreign demand and improvements in the price competitiveness of the euro area. Imports grew by EUR 11 billion in November, as compared with the same month a year earlier (from ECU 54.2 billion to EUR 65.2 billion), contributing to a cumulative decline of EUR 17 billion in the goods surplus for the first eleven months of 1999, compared with the same period in 1998. The sustained increase in imports of goods appears largely to reflect the sharp rise in import prices during 1999, owing to higher oil prices and the decline of the euro. Turning to the financial account, net direct investment outflows amounted to EUR 17.5 billion in November. Between January and November 1999 net direct investment outflows totalled EUR 120.6 billion, substantially more than the ECU 99.4 billion recorded in the same period of 1998. The figures for the first eleven months of 1999 reflect both higher direct investment abroad by euro area residents and lower foreign direct investment in the euro area. The sectoral breakdown of portfolio investment asset flows, which is now available for the third quarter of 1999, shows that most of the net purchases abroad recorded in this item were carried out by investors outside the MFI and general government sectors. Errors and omissions amounted to a negative EUR 2.6 billion in November and a positive EUR 5.8 billion for the first eleven months of 1999.

en ECB Monthly Bulletin In the light of new information, the ECB has revised the b.o.p monthly key items for the third quarter of 1999 (Annexes 2 and 3). Revisions for the third quarter left the current account surplus broadly unchanged, despite amended balances in the individual categories. Compared with previous figures, the revisions resulted in smaller deficits for services and income, which were broadly offset by a larger deficit for current transfers and a slightly smaller surplus for trade in goods. The financial account for the third quarter of 1999 was revised from minus EUR 3.4 billion to minus EUR 6.7 billion, as a result of relatively limited revisions in most sub-accounts.

 ) contains statistics produced by the Eurosystem in respect of the balance of payments (b.o.p.) of the euro area; the methodology has been set up in close co-operation with the European Commission (Eurostat) which publishes the b.o.p. for the European Union. The ECB compiles these statistics on the basis of the data on extra-euro area transactions reported by euro area countries. The results for November 1999 will also be published in the February 2000 issue of the . A detailed methodological note on euro area b.o.p. statistics is available on the ECB's Web site.

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