Euro area balance of payments in May 2014 and international investment position at the end of the first quarter 2014

In May 2014 the seasonally adjusted current account of the euro area recorded a surplus of €19.5 billion. In the financial account, combined direct and portfolio investment recorded net inflows of €60 billion (non-seasonally adjusted).

At the end of the first quarter of 2014 the international investment position of the euro area recorded net liabilities of €1.2 trillion vis-à-vis the rest of the world (approximately 12% of euro area GDP). This represented an increase of €24 billion in comparison with the revised data for the end of 2013.

Balance of payments in May 2014

The seasonally adjusted current account of the euro area recorded a surplus of €19.5 billion in May 2014 (see Table 1). This reflected surpluses for goods (€13.8 billion), services (€13.0 billion) and income (€1.7 billion), which were partially offset by a deficit for current transfers (€8.9 billion).

The 12-month cumulated seasonally adjusted current account recorded a surplus of €234.2 billion in May 2014 (2.4% of euro area GDP; see Table 1 and Chart 1), compared with a surplus of €191.7 billion a year earlier (2.0% of euro area GDP). This resulted from increases in the surpluses for goods (from €138.4 billion to €173.9 billion) and services (from €97.7 billion to €119.3 billion) and was partly offset by the decrease in the surplus for income (from €66.8 billion to €59.8 billion) and the increase in the deficit for current transfers (from €111.2 billion to €118.9 billion).

In the financial account (see Table 2), combined direct and portfolio investment recorded net inflows of €60 billion in May 2014 as a result of net inflows for both direct investment and portfolio investment.

The net inflows for direct investment (€12 billion) resulted from net inflows for other capital (€19 billion), which were partly offset by outflows for equity capital and reinvested earnings (€7 billion). The net inflows for portfolio investment (€48 billion) were broadly explained by developments in debt instruments (mostly bonds and notes).

The financial derivatives account recorded net outflows of €2 billion.

Other investment recorded net outflows (€66 billion), reflecting net outflows for MFIs excluding the Eurosystem (€62 billion) and general government (€4 billion). The Eurosystem recorded minor net inflows, while other sectors recorded minor net outflows.

The Eurosystem’s stock of reserve assets increased by €1 billion in May 2014 (from €568 billion to €569 billion), mainly on account of net acquisitions of assets.

In the 12-months to May 2014 combined direct and portfolio investment recorded cumulated net inflows of €41 billion, compared with net inflows of €76 billion in the preceding 12-month period. This decrease was the result of lower net inflows for portfolio investment (down from €170 billion to €115 billion), which were partly offset by lower net outflows for direct investment (down from €94 billion to €74 billion).

International investment position at the end of the first quarter of 2014

At the end of the first quarter of 2014 the international investment position of the euro area recorded net liabilities of €1.2 trillion vis-à-vis the rest of the world (approximately 12% of euro area GDP; see Chart 2). This represented an increase of €24 billion in comparison with the revised data for the end of 2013 (see Table 3).

This increase in the net liability position was the result of higher net liability positions for portfolio investment (€3,462 billion, up from €3,275 billion) and financial derivatives (€86 billion, up from €39 billion), which were partly offset by higher net asset positions for direct investment (€1,601 billion, up from €1,453 billion), other investment (€200 billion, up from €166 billion) and reserve assets (€571 billion, up from €542 billion). The changes in the net positions for direct investment, portfolio investment, financial derivatives and reserve assets mainly reflected “other changes” (predominantly revaluations on account of changes in exchange rates and asset prices).

At the end of the first quarter of 2014 the gross external debt of the euro area amounted to €11.8 trillion (approximately 123% of euro area GDP), which represented an increase of €218 billion compared with the revised data for the end of 2013.

Data revisions

This press release incorporates revisions to the monthly balance of payments for the period from October 2013 to April 2014, and to the quarterly international investment position at the end of 2013.

The revisions to the balance of payments in April 2014 have not significantly altered the data previously published. The revisions to the current account balances for the first quarter of 2014 resulted in a slight decrease in the surplus observed, whereas the revisions to the financial account were moderate and mainly affected non-MFIs.

The revisions to the international investment position at the end of 2013 did not significantly change the net liability position of the euro area; however, there were some offsetting revisions to all components ( direct investment, portfolio investment and other investment).

Additional information on the euro area balance of payments and international investment position

In this press release, the seasonally adjusted current account refers to working day and seasonally adjusted data. Data for the financial account are not working day or seasonally adjusted.

In line with the agreed allocation of responsibilities, the European Central Bank compiles and disseminates monthly and quarterly balance of payments statistics for the euro area, whereas the European Commission (Eurostat; see news releases for “Euro-indicators”) focuses on quarterly and annual aggregates for the European Union. These data comply with international standards, particularly those set out in the IMF’s Balance of Payments Manual (fifth edition). The aggregates for the euro area and the European Union are compiled consistently on the basis of transactions and positions vis-à-vis residents of countries outside the euro area and the European Union respectively.

A complete set of updated euro area balance of payments statistics (including a quarterly geographical breakdown for the main counterparts) and international investment position statistics as well as historical euro area balance of payments time series, can be downloaded from the ECB’s Statistical Data Warehouse (SDW). Data up to May 2014 will also be published in the August 2014 issues of the ECB’s Monthly Bulletin and Statistics Pocket Book. Detailed methodological notes are available on the ECB’s website. The next press release on the euro area monthly balance of payments will be published on 19 August 2014. The ECB will start publishing, at the end of 2014, the euro area balance of payments and international investment position statistics in accordance with its Guideline ECB/2011/23, which adheres to the sixth edition of the IMF’s Balance of Payments and International Investment Position Manual (BPM6). More detailed information is available on a dedicated webpage

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Annexes

Table 1: Current account of the euro area

Table 2: Monthly balance of payments of the euro area

Table 3: Quarterly international investment position of the euro area