Euro Area Balance of Payments (June 2008)

In June 2008 the working day and seasonally adjusted current account of the euro area recorded a deficit of EUR 8.2 billion. In the financial account, combined direct and portfolio investment showed net inflows of EUR 32 billion.

The working day and seasonally adjusted current account of the euro area recorded a deficit of EUR 8.2 billion in June 2008 (corresponding to a deficit of EUR 1.0 billion in non-adjusted terms). This reflected deficits in current transfers (EUR 6.5 billion), goods (EUR 2.0 billion) and income (EUR 1.2 billion), which were only partly offset by a surplus in services (EUR 1.5 billion).

The 12-month cumulated, working day-adjusted current account up to June 2008 recorded a deficit of EUR 19.6 billion (about 0.2% of euro area GDP), compared with a surplus of EUR 19.0 billion a year earlier. This shift was due mainly to a decrease in the surplus in goods (from EUR 50.5 billion to EUR 26.8 billion), an increase in the deficit in current transfers (from EUR 80.0 billion to EUR 94.8 billion) and a shift from surplus to deficit in the income account (from EUR 4.1 billion to EUR -1.4 billion). Conversely, the services surplus increased from EUR 44.5 billion to EUR 49.8 billion.

In the financial account, combined direct and portfolio investment recorded net inflows of EUR 32 billion in June 2008, reflecting net inflows in portfolio investment (EUR 54 billion) and net outflows in direct investment (EUR 22 billion).

The net outflows in direct investment resulted from net outflows both in equity capital and reinvested earnings (EUR 16 billion) and in other capital, mostly inter-company loans (EUR 6 billion).

Portfolio investment recorded net inflows both in equity (EUR 7 billion) and in debt instruments (EUR 48 billion). The net inflows in debt instruments reflected mainly net purchases of euro area securities by non-residents, specifically bonds and notes (EUR 29 billion) and money market instruments (EUR 23 billion).

Financial derivatives recorded net inflows of EUR 5 billion.

Other investment showed net outflows of EUR 22 billion, mainly as a result of net outflows in MFIs excluding the Eurosystem (EUR 20 billion).

Reserve assets decreased by EUR 1 billion (excluding valuation effects). The stock of the Eurosystem’s reserve assets stood at EUR 354 billion at the end of June 2008.

In the 12-month period to June 2008 combined direct and portfolio investment showed cumulated net outflows of EUR 54 billion, compared with net inflows of EUR 200 billion a year earlier. This shift largely resulted from a decline in net inflows in portfolio investment (from EUR 372 billion to EUR 149 billion), which in turn mainly reflected a reduction in net purchases of euro area securities by non-resident investors (from EUR 943 billion to EUR 418 billion).

In addition to the balance of payments for June 2008, this press release incorporates revisions for May 2008. Those revisions have resulted in a somewhat lower current account deficit (EUR 19.6 billion instead of EUR 21.4 billion in non-adjusted terms).

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 historical euro area balance of payments time series, can be downloaded from the ECB’s Statistical Data Warehouse (SDW). Data up to June 2008 will also be published in the September 2008 issues of the ECB’s Monthly Bulletin and 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 September 2008.

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 historical euro area balance of payments time series, can be downloaded from the ECB’s Statistical Data Warehouse (SDW). Data up to June 2008 will also be published in the September 2008 issues of the ECB’s Monthly Bulletin and 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 September 2008.

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.