Euro area monthly balance of payments (July 2016)

• In July 2016 the current account of the euro area recorded a surplus of €21.0 billion.^[1]
• In the financial account, combined direct and portfolio investment recorded net acquisitions of assets of €58 billion and net disposals of liabilities of €14 billion.

Current account

The current account of the euro area recorded a surplus of €21.0 billion in July 2016 (see Table 1). This reflected surpluses for goods (€26.4 billion), services (€4.9 billion) and primary income (€3.4 billion), which were partly offset by a deficit in secondary income (€13.7 billion).

The 12-month cumulated current account for the period ending in July 2016 recorded a surplus of €343.2 billion (3.2% of euro area GDP), compared with one of €309.7 billion (3.0% of euro area GDP) for the 12 months to July 2015 (see Table 1 and Chart 1). This development was mostly due to an increase in the surpluses for both goods (from €318.8 billion to €363.0 billion) and services (from €63.6 billion to €64.9 billion), as well as a decrease in the deficit for secondary income (from €134.5 billion to €126.0 billion). These were partly offset by decreases in the surplus for primary income (from €61.9 billion to €41.3 billion).

Financial account

In July 2016 combined direct and portfolio investment recorded net acquisitions of assets of €58 billion and net disposals of liabilities of €14 billion (see Table 2).

Euro area residents recorded net acquisitions of €16 billion in direct investment assets, driven by net acquisitions of equity (€10 billion) and debt instruments (€6 billion). Direct investment liabilities decreased by €4 billion as a result of net disposals of debt instruments (€6 billion), which was partly offset by net acquisitions of equity (€3 billion) by non-euro area residents.

As regards portfolio investment assets, euro area residents made net acquisitions of foreign securities amounting to €42 billion, reflected in net purchases of long-term debt securities (€50 billion) and equity (€11 billion) that were partly offset by net disposals of short-term debt securities (€19 billion). Portfolio investment liabilities recorded net disposals by non-euro area residents of €11 billion, which was reflected in net sales/amortisations by non-euro area residents of both short-term (€28 billion) and long-term (€14 billion) debt securities issued by euro area residents. This was partly offset by non-euro area residents’ net acquisitions of euro area equity (€31 billion).

The euro area net financial derivatives account (assets minus liabilities) recorded positive net flows of €6 billion.

Other investment recorded increases of €60 billion in assets and €138 billion in liabilities. The net acquisition of assets by euro area residents was mainly attributable to the MFI sector (excluding the Eurosystem) (€74 billion) and was partly offset by net disposals of the other sectors (€6 billion), the Eurosystem (€6 billion) and general government (€2 billion). The net incurrence of liabilities was explained by transactions of the MFI sector (excluding the Eurosystem) (€151 billion), which were partly offset by net disposals of the other sectors (€10 billion), the Eurosystem (€3 billion) and general government (€1 billion).

In the 12 months to July 2016 combined direct and portfolio investment recorded increases of €886 billion in assets and €288 billion in liabilities, compared with increases of €1,024 billion and €656 billion respectively in the 12 months to July 2015. This primarily reflected a shift in portfolio investment liabilities from net acquisitions of euro area securities by non-euro area residents (€202 billion) to net sales/amortisations (€44 billion).

Direct investment recorded a reduction in the net acquisition of assets (from €550 billion to €453 billion) and the net incurrence of liabilities (from €454 billion to €332 billion). This pattern is mainly explained by a reduction in investment in debt instruments, from both euro area residents (from €222 billion to €49 billion) and non-euro area residents (from €140 billion to €41 billion).

According to the monetary presentation of the balance of payments, the net external assets of euro area MFIs decreased by €159 billion in the 12 months to July 2016, compared with a decrease of €44 billion in the 12 months to July 2015. This reflected an increase in the surplus in the current and capital account balance (from €290 billion to €352 billion), which was offset by net transactions in other items. In particular, the cumulated transactions in the portfolio investment liabilities issued by non-MFI euro area residents showed a shift from net purchases of debt securities (€11 billion) to net sales/amortisations (€149 billion) and a decrease in the investment in non-MFI euro area equity securities (from €181 billion to €114 billion) by non-euro area residents.

In July 2016 the Eurosystem’s stock of reserve assets increased by €2.8 billion to €724.6 billion (see Table 3). This was mostly explained by positive price revaluations, particularly of monetary gold (€4.6 billion).

Data revisions

This press release incorporates revisions for April, May and June 2016. These revisions have not significantly altered the figures previously published.

Additional information

Time series data: ECB’s Statistical Data Warehouse (SDW)

Methodological information: ECB’s website

Monetary presentation of the balance of payments

Next press releases:

• Quarterly balance of payments and international investment position: 7 October 2016 (reference data up to the second quarter of 2016);
• Monthly balance of payments: 20 October 2016 (reference data up to August 2016);

Annexes

Table 1: Current account of the euro area

Table 2: Balance of payments of the euro area

Table 3: Reserve Assets of the euro area

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