Euro area balance of payments (April 2007)

The working day and seasonally adjusted current account of the euro area recorded a deficit of EUR 4.0 billion in April 2007, mainly as a result of a deficit in current transfers that was partly offset by surpluses in goods and services. In the financial account, combined direct and portfolio investment recorded net outflows of EUR 8 billion; net outflows in direct investment were partially counterbalanced by net inflows in portfolio investment.

The working day and seasonally adjusted current account of the euro area recorded a deficit of EUR 4.0 billion in April 2007 (corresponding to a deficit of EUR 6.5 billion in non-seasonally adjusted terms). This reflected a deficit in current transfers (EUR 8.8 billion) that was partly counterbalanced by surpluses in goods (EUR 3.5 billion) and services (EUR 2.2 billion). The income account was balanced.

The 12-month cumulated, working day-adjusted current account up to April 2007 recorded a surplus of EUR 7.7 billion, i.e. about 0.1% of GDP, compared with a deficit of EUR 20.0 billion a year earlier. This shift resulted mainly from an increase in the surplus in goods (by EUR 17.8 billion) and a reduction in the income deficit (by EUR 10.7 billion).

In the financial account, combined direct and portfolio investment recorded net outflows of EUR 8 billion in April 2007, reflecting net outflows in direct investment (EUR 24 billion) that were partially offset by net inflows in portfolio investment (EUR 16 billion).

The developments in direct investment were accounted for by net outflows in both equity capital and reinvested earnings (EUR 14 billion) and other capital (mostly inter-company loans) (EUR 10 billion). The developments in both items were driven mainly by euro area investment abroad.

In portfolio investment, debt instruments recorded net inflows of EUR 25 billion that were partly offset by net outflows of EUR 8 billion in equity securities. These developments predominantly reflected net purchases of euro area debt instruments by non-residents (EUR 56 billion) and net purchases of foreign equity by euro area residents (EUR 11 billion).

Other investment recorded net inflows of EUR 31 billion, mainly as a result of net inflows by monetary financial institutions ( MFIs) excluding the Eurosystem (EUR 38 billion), which were partially offset by net outflows in other sectors (EUR 12 billion).

Reserve assets increased by EUR 2 billion (excluding valuation effects). At the end of April 2007 the stock of the Eurosystem’s reserve assets stood at EUR 330 billion.

In the 12-month period to April 2007, combined direct and portfolio investment showed cumulated net inflows of EUR 228 billion, compared with net outflows of EUR 28 billion a year earlier. This shift resulted mainly from higher net inflows in portfolio investment (from EUR 164 billion to EUR 408 billion) and, to a much smaller extent, from lower net outflows in direct investment (from EUR 192 billion to EUR 181 billion). The developments in portfolio investment largely reflected higher purchases of euro area bonds and notes by non-residents (from EUR 254 billion to EUR 525 billion).

In addition to the balance of payments for April 2007, this press release incorporates revisions for March 2007. Those revisions have not significantly affected the previously published data.

A complete set of updated euro area balance of payments and international investment position statistics is available on the ECB’s website in the “Statistics” section under the headings “Data services”/“Latest monetary, financial markets and balance of payments statistics”. These data, as well as the euro area data according to the composition of the euro area during the reference period, can be downloaded using the ECB’s Statistical Data Warehouse (SDW). Results up to April 2007 will also be published in the July 2007 issues of the ECB’s Monthly Bulletin and the Statistics Pocket Book. A detailed methodological note is available on the ECB’s website. The next press release on the euro area monthly balance of payments will be published on 24 July 2007.

Table 1: Current account of the euro area – working day and seasonally adjusted data.

Table 2: Monthly balance of payments of the euro area – non-seasonally adjusted data.