Monthly developments in March 2001

The deficit on the current account for the first quarter of 2001 stood at EUR 9.2 billion, compared with a deficit of EUR 11.5 billion for the corresponding period in 2000. This reduction in the current account deficit is mainly due to an increase in the goods surplus (by EUR 3.6 billion between the first quarter of 2000 and the first quarter of 2001) and a lower deficit for current transfers (which decreased by EUR 1.5 billion over the same period), more than compensating higher deficits in services and income (which were EUR 2.4 billion and EUR 0.3 billion higher, respectively). The improvement in the goods balance for the first quarter of 2001 stems from export values growing faster (by 15.7% since the first quarter of 2000) than import values (by 14.3%). The decrease in the cumulative deficit for current transfers is mainly associated with a surplus of EUR 2.5 billion in January 2001. For the first quarter of 2001, net capital outflows in direct and portfolio investment amounted to EUR 86.0 billion, compared with EUR 42.9 billion in the first quarter of 2000. This increase in outflows is mostly attributable to the direct investment account experiencing net inflows of EUR 147.5 billion in the first quarter of 2000, while it showed net outflows of EUR 47.5 billion in the first quarter of 2001. Errors and omissions amounted to a negative EUR 18.3 billion in March 2001 and to a negative EUR 12.2 billion in the first quarter of 2001.

The current account of the balance of payments of the euro area showed a deficit of EUR 2.8 billion in March 2001, compared with a zero balance in March 2000 (all figures refer to the Euro 12). This change was primarily due to an increase in the deficit for services (to EUR 2.8 billion in March 2001 from EUR 0.3 billion in March 2000), current transfers (to EUR 4.6 billion in March 2001 from EUR 2.7 billion in March 2000) and income, which more than compensated the higher surplus in the goods accounts (EUR 5.3 billion in March 2001 and EUR 3.3 billion in March 2000). In the financial account, net capital outflows in direct and portfolio investment amounted to EUR 36.2 billion in March 2001. This was due to a net outflow of EUR 42.3 billion in direct investment, resulting from net outflows of EUR 37.5 billion in other capital (mostly intercompany loans), while portfolio investment recorded net inflows of EUR 6.1 billion. The relatively high net outflows in other capital were linked to some transactions of affiliates resident in the euro area with their parent companies outside the euro area, while the inflows in portfolio investment were largely influenced by equity transactions, which led to net inflows in equity assets. Elsewhere in the financial account, net inflows in financial derivatives amounted to EUR 3.9 billion in March 2001. The other investment account shows high net inflows (EUR 50.3 billion) in March, which were partly connected to the net outflows in direct investment. Reserve assets decreased by EUR 2.6 billion in March 2001 (excluding valuation effects).

Note on balance of payments statistics produced by the Eurosystem

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Annex

The methodology used was developed in close co-operation with the European Commission (Eurostat) which publishes the Balance of Payments 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 March 2001 will also be published in the June 2001 issue of the . A detailed methodological note is available on the ECB's website.

Table 1

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: Euro area balance of payments - monthly developments in March 2001 and notional Euro 12 data for 2000. Reproduction is permitted provided that the source is acknowledged