Euro area balance of payments (April 2009)

In April 2009 the working day and seasonally adjusted current account of the euro area recorded a deficit of EUR 5.9 billion. In the financial account, combined direct and portfolio investment showed net outflows of EUR 7 billion.

The working day and seasonally adjusted current account of the euro area recorded a deficit of EUR 5.9 billion in April 2009 (corresponding to a deficit of EUR 9.2 billion in non-adjusted terms). This reflected deficits in current transfers (EUR 8.8 billion) and income (EUR 2.7 billion), which were only partly offset by surpluses in services (EUR 2.9 billion) and goods (EUR 2.6 billion). The surplus in goods occurred after five consecutive months of deficits.

The 12-month cumulated, working day-adjusted current account up to April 2009 recorded a deficit of EUR 105.7 billion (about 1.1% of euro area GDP), compared with a deficit of EUR 13.4 billion a year earlier. This increase resulted from a shift in the goods account from a surplus (EUR 37.5 billion) to a deficit (EUR 11.8 billion), from increases in the deficits in income (from EUR 9.7 billion to EUR 32.5 billion) and current transfers (from EUR 93.3 billion to EUR 96.6 billion), and from a decrease in the surplus in services (from EUR 52.0 billion to EUR 35.2 billion).

In the financial account, combined direct and portfolio investment showed net outflows of EUR 7 billion in April 2009, reflecting net outflows in both portfolio investment (EUR 6 billion) and direct investment (EUR 1 billion).

The modest net outflows in direct investment resulted from net outflows in other capital (mostly inter-company loans) (EUR 1 billion). Direct investment in the form of equity capital and reinvested earnings was balanced Regarding the latter category of direct investment, the quite significant amounts in April 2009 for both net investment by euro area corporations abroad and net investment in the euro area by foreign corporations (EUR 48 billion) were mainly related to an investment channelled by a euro area financial vehicle corporation from one country outside the euro area to another country outside the euro area. Accordingly, this transaction did not affect the balance of direct investment.

Portfolio investment recorded net outflows in equity (EUR 19 billion), mainly reflecting net sales of euro area equities by non-residents, which were to some extent offset by net inflows in debt instruments (EUR 13 billion). The latter were predominantly related to net purchases of euro area money market instruments by non-residents.

Financial derivatives recorded net inflows of EUR 7 billion.

Other investment recorded net inflows of EUR 3 billion as a result of net inflows in other sectors (EUR 26 billion) and general government (EUR 9 billion) that were largely counterbalanced by net outflows from the Eurosystem (EUR 31 billion) and MFIs excluding the Eurosystem (EUR 2 billion).

Reserve assets were balanced (excluding valuation effects). The stock of the Eurosystem’s reserve assets stood at EUR 387 billion at the end of April 2009.

In the 12-month period to April 2009, combined direct and portfolio investment showed cumulated net inflows of EUR 296 billion, compared with net outflows of EUR 40 billion a year earlier. This shift mainly resulted from a rise in net inflows in portfolio investment (from EUR 131 billion to EUR 497 billion), largely reflecting a shift from net outflows to net inflows in money market instruments. The increase in net inflows in portfolio investment was to some extent offset by higher net outflows in direct investment (from EUR 171 billion to EUR 201 billion).

In addition to the balance of payments for April 2009, this press release incorporates revisions for March 2009. These revisions have resulted in lower net outflows in direct investment (from EUR 25 billion to EUR 19 billion) and lower net inflows in portfolio investment (from EUR 96 billion to EUR 86 billion).

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 April 2009 will also be published in the July 2009 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 23 July 2009.

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.