Monthly developments in April 2000

Recent underlying trends are better assessed by analysing the accumulated flows over the first four months of 2000 as income figures for individual months in 2000 are not strictly comparable with the same months a year earlier, owing to a new compilation method. The accumulated figures show a current account deficit of EUR 4.4 billion, compared with a surplus of EUR 11.1 billion for the same period last year. A lower goods surplus (EUR 21.3 billion, down from EUR 29.5 billion) explains the greater part of the decline over this period owing to a 27% rise in the value of imports, compared with a 20% increase in export values. Strong growth in imports reflects rising import prices largely due to higher oil prices and the decline in the exchange rate of the euro. Increases in the deficits on services, income and current transfers also contributed to the decline in the current account during the first four months of 2000 when compared with the corresponding period in 1999. In addition, portfolio investment recorded net outflows in April, amounting to EUR 7.9 billion. The main source of outflows was strong investment on the part of euro area residents in foreign equities (EUR 18.2 billion), reinforced by disinvestment of euro area equities by non-residents (EUR 4.7 billion), resulting in net total equity outflows of EUR 22.9 billion. In the first four months of 2000, a net inflow of EUR 42.7 billion in euro area debt instruments was reported, as compared with net outflows of EUR 10.5 billion in the same period of the previous year. This swing from net outflows to net inflows arose from both a decline in investment in foreign debt instruments - in particular foreign bonds and notes - by euro area residents, and from a strong increase in purchases of euro area debt instruments - in particular money market instruments - by non residents of the euro area. Errors and omissions amounted to a negative EUR 3.4 billion in April 2000. en ECB Monthly Bulletin

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The current account of the euro area recorded a deficit of EUR 3.2 billion in April 2000, compared with a surplus of EUR 4.8 billion for the same month last year. Half of the decline was due to a fall in the income account from a surplus of EUR 0.1 billion, to a deficit of EUR 3.9 billion. Changes in the other accounts also contributed to the current account deficit as the goods surplus fell by EUR 2.0 billion and the deficits on services and current transfers increased by EUR 0.8 billion and EUR 1.1 billion respectively. In April 2000, the transactions in the financial account were subdued compared with the flows in the previous two months which for direct and portfolio equity investment had been strongly influenced by a major merger between a euro area resident and a non-euro area resident against an exchange of shares. Direct investment showed a net outflow of EUR 6.2 billion in April, reflecting direct investment abroad of EUR 18.6 billion and direct investment in the euro area of EUR 12.4 billion. In contrast, net inflows of EUR 15 billion in debt instruments were observed in April, affecting both bonds and notes (EUR 9.1 billion) and money market instruments (EUR 5.9 billion). Elsewhere in the financial account, net inflows in financial derivatives reached EUR 2.1 billion and EUR 16.8 billion in other investment in April 2000. Eurosystem reserve assets fell by EUR 0.2 billion in April. Annex 1 (  pdf 6 kB,  ) to this press release contains statistics produced by the Eurosystem in respect of the balance of payments (b.o.p.) of the euro area; the methodology has been developed 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 April 2000 will also be published in the July 2000 issue of the . A detailed methodological note on euro area b.o.p. statistics is available on the ECB's website ("Euro area statistics - download"). Reproduction is permitted provided that the source is acknowledged