Euro area balance of payments (June 2007)

The working day and seasonally adjusted current account of the euro area recorded a surplus of EUR 5.9 billion in June 2007, as surpluses in goods and services exceeded a deficit in current transfers. In the financial account, combined direct and portfolio investment recorded net inflows of EUR 25 billion, reflecting net inflows in portfolio investment which were partly offset by net outflows in direct investment. Net inflows in portfolio investment were mainly driven by net purchases of euro area equity securities by non-residents.

The working day and seasonally adjusted current account of the euro area recorded a surplus of EUR 5.9 billion in June 2007 (corresponding to a surplus of EUR 11.4 billion in non-seasonally adjusted terms). This reflected surpluses in goods (EUR 7.0 billion) and services (EUR 3.9 billion) that were only partly offset by a deficit in current transfers (EUR 4.9 billion). The income account was balanced.

The 12-month cumulated, working day-adjusted current account up to June 2007 recorded a surplus of EUR 3.2 billion, which is less than 0.1% of GDP, compared with a deficit of EUR 24.1 billion a year earlier. This shift mainly resulted from an increase in the goods surplus (by EUR 32.2 billion), which was partly compensated for by an increase in the deficit in current transfers (by EUR 6.3 billion).

In the financial account, combined direct and portfolio investment recorded net inflows of EUR 25 billion in June 2007, reflecting net inflows in portfolio investment (EUR 70 billion) that were partly offset by net outflows in direct investment (EUR 45 billion).

The developments in direct investment were accounted for by net outflows in both equity capital and reinvested earnings (EUR 32 billion) and other capital (mostly inter-company loans) (EUR 13 billion).

Within portfolio investment, net inflows in equity securities (EUR 81 billion) were mainly accounted for by net purchases of euro area equity securities by non-residents. In contrast, net sales of money market instruments by non-residents contributed to net outflows in debt instruments (EUR 11 billion).

Other investment recorded net outflows of EUR 57 billion, principally as a result of net outflows by monetary financial institutions ( MFIs) excluding the Eurosystem (EUR 36 billion), other sectors (EUR 16 billion), and general government (EUR 12 billion).

Reserve assets increased by EUR 2 billion (excluding valuation effects). At the end of June 2007 the stock of the Eurosystem’s reserve assets stood at EUR 325 billion.

In the 12-month period to June 2007, combined direct and portfolio investment showed cumulated net inflows of EUR 145 billion, compared with net outflows of EUR 46 billion a year earlier. This shift mainly resulted from higher net inflows in portfolio investment (from EUR 156 billion to EUR 356 billion), while direct investment showed slightly higher net outflows than in the previous 12-month period (from EUR 202 billion to EUR 210 billion). The developments in portfolio investment largely reflected higher purchases of euro area bonds and notes by non-residents (from EUR 238 billion to EUR 510 billion).

In addition to the balance of payments for June 2007, this press release incorporates revisions for May 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”.

The data can also be downloaded using the ECB’s Statistical Data Warehouse (SDW) at http://sdw.ecb.europa.eu (as well as the euro area data according to the composition of the euro area during the reference period).

Results up to June 2007 will also be published in the September 2007 issue 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 21 September 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.