PRESS RELEASE

Euro area monthly balance of payments (October 2017)

20 December 2017
  • In October 2017 the current account of the euro area recorded a surplus of €30.8 billion.[1]
  • In the financial account, combined direct and portfolio investment recorded net acquisitions of assets of €61 billion and net disposals of liabilities of €18 billion.

Current account

The current account of the euro area recorded a surplus of €30.8 billion in October 2017 (see Table 1). This reflected surpluses for goods (€26.2 billion), primary income (€9.8 billion) and services (€7.3 billion), which were partly offset by a deficit for secondary income (€12.5 billion).

The 12-month cumulated current account for the period ending in October 2017 recorded a surplus of €349.6 billion (3.2% of euro area GDP), compared with one of €363.4 billion (3.4% of euro area GDP) for the 12 months to October 2016 (see Table 1 and Chart 1). This development was due to a decrease in the surplus for goods (from €373.7 billion to €340.4 billion) and an increase in the deficit for secondary income (from €137.9 billion to €150.6 billion). These were partly offset by increases in the surpluses for services (from €48.4 billion to €66.2 billion) and primary income (from €79.1 billion to €93.6 billion).

Financial account

In October 2017 combined direct and portfolio investment recorded net acquisitions of assets of €61 billion and net disposals of liabilities of €18 billion (see Table 2).

Euro area residents recorded a net increase of €35 billion of direct investment assets as a result of net investments in debt instruments (€49 billion), which were partly offset by net disinvestments in equity (€13 billion). Direct investment liabilities increased by €6 billion as a result of net acquisitions of euro area debt instruments (€11 billion) by non-euro area residents. This was partly offset by net disposals of euro area equity by non-euro area residents (€5 billion).

With regard to portfolio investment assets, euro area residents made net purchases of foreign securities amounting to €26 billion. This resulted from net acquisitions of equity (€25 billion) and long-term debt securities (€13 billion), which were partly offset by net sales/amortisations of short-term debt securities (€12 billion). Portfolio investment liabilities decreased by €25 billion as a result of non-euro area residents’ net sales of euro area short-term and long-term debt securities (€26 billion and €46 billion respectively), which were partly offset by net acquisitions of euro area equity (€48 billion).

The euro area net financial derivatives account (assets minus liabilities) recorded negative net flows of €1 billion.

Other investment recorded net acquisitions of assets amounting to €131 billion and net incurrences of liabilities of €170 billion. The net acquisition of assets was explained by MFIs (excluding the Eurosystem) (€118 billion) and, to a lesser extent, by other sectors (€16 billion), and was partly offset by decreases in assets of the Eurosystem (€3 billion). The incurrence of liabilities were attributable to MFIs (excluding the Eurosystem) (€204 billion) and other sectors (€2 billion). These were partly offset by non-euro area residents’ net disposals of assets vis-à-vis the Eurosystem (€36 billion).

In the 12 months to October 2017 combined direct and portfolio investment recorded net acquisitions of assets of €721 billion and net incurrences of liabilities of €298 billion, compared with €967 billion and €262 billion respectively in the 12 months to October 2016. This resulted primarily from a decrease in the direct investment activities of both euro area residents abroad and non-residents in the euro area, with the net acquisition of equity assets decreasing from €548 billion to €75 billion and a shift in equity liabilities, from net investments of non-euro area residents of €410 billion to net disinvestments of €84 billion. The changes in direct investment were partly offset by developments in portfolio investment, in particular those related to transactions in equity. On the asset side, there was a shift from net sales of foreign equity by euro area residents of €2 billion to net purchases of €169 billion. On the liabilities side, the non-euro area residents increased the net purchases of euro area equities from €128 billion to €368 billion.

According to the monetary presentation of the balance of payments, the net external assets of euro area monetary financial institutions (MFIs) decreased by €77 billion in the 12 months to October 2017, compared with a decrease of €293 billion in the 12 months to October 2016. The counterpart entries of the current and capital account surplus are essentially reflected in the net financial transactions of the non-MFIs, although in a more limited manner than in the 12 months to October 2016.

In October 2017, the Eurosystem’s stock of reserve assets increased to €676.5 billion from €674.8 billion in the previous month (see Table 3). This increase (€1.7 billion) was mainly explained by positive exchange rate developments (€3 billion) and positive price changes (€0.9 billion), which more than offset net disinvestments (€2.7 billion).

Data revisions

This press release incorporates revisions to the data for July to September 2017. These revisions have not significantly altered the figures previously published.

Additional information

Annexes

For media queries, please contact Philippe Rispal, tel.: +49 69 1344 5482.



[1] References to the current account are always to data that are seasonally and working day-adjusted, unless otherwise indicated, whereas references to the capital and financial accounts are to data that are neither seasonally nor working day-adjusted.

[2] The quarterly press release on 11 January 2018 will incorporate revisions (up to September 2017) to the monthly data published in this present monthly press release.

Media contacts