Euro area balance of payments (geographical breakdown for the fourth quarter of 2006) and international investment position (at the end of the fourth quarter of 2006)

The current account of the euro area balance of payments (b.o.p.) recorded a surplus of EUR 21.3 billion in the fourth quarter of 2006, which resulted from surpluses in goods, services and income that were partly offset by a deficit in current transfers. From a geographical perspective, surpluses with the United Kingdom, the United States and the countries that joined the European Union in 2004 and 2007 were only partly offset by deficits with the group of “other countries” (i.e. all countries outside the European Union with the exception of the G7 countries and Switzerland), Japan and the EU institutions. In the financial account, net outflows in direct investment were mainly directed towards the group of “other countries”, the United States, offshore financial centres and Switzerland. In portfolio investment, foreign securities purchased by euro area residents were mainly issued in the United States, the United Kingdom and the group of “other countries”.

At the end of 2006, the international investment position (i.i.p.) of the euro area showed net liabilities of EUR 970 billion vis-à-vis the rest of the world (around 12% of euro area GDP), which represented an increase of about EUR 13 billion in comparison with the revised data for the end of the third quarter of 2006. This increase was mainly due to net valuation changes of stocks of foreign assets and liabilities.

This press release reflects data related to the euro area including Slovenia. In particular, the changes to the euro area b.o.p. and i.i.p. compared with previous press releases involve: (i) the inclusion of transactions and positions between Slovenian residents and non-euro area residents, and (ii) the exclusion of transactions and positions between euro area residents and Slovenian residents. In addition, owing to the enlargement of the European Union at the beginning of 2007, Bulgaria and Romania are now included in the category “other EU countries” in the geographical breakdown.

At the end of 2006, the i.i.p. of the euro area recorded net liabilities of EUR 970 billion vis-à-vis the rest of the world (representing around 12% of euro area GDP). This amounted to an increase of EUR 13 billion in comparison with the revised data for the end of the third quarter of 2006 (see Table 2). This increase was mainly caused by “other changes” (primarily revaluations, due to exchange rate and asset price changes, or reclassifications).

The change in the net i.i.p. largely resulted from an increase in the net liability position in portfolio investment (from EUR 1,295 billion to EUR 1,474 billion), which was partly offset by a decrease in the net liability position in other investment (from EUR 405 billion to EUR 280 billion) and an increase in the net asset position in direct investment (from EUR 433 billion to EUR 473 billion).

This press release incorporates revisions of the b.o.p. (with a geographical breakdown) as from the first quarter of 2004 and of the i.i.p. as from the first quarter of 2006. The revisions of the b.o.p. primarily affected direct, portfolio and other investment, as well as the income on direct and other investment. The revisions to the i.i.p. mostly affected the net liability positions in portfolio investment and in other investment for the first and third quarters of 2006.

Geographical details for the quarterly b.o.p. of the euro area are not available for the items portfolio investment liabilities, financial derivatives or reserve assets. Geographical details of the i.i.p. are only available at an annual frequency.

The ECB and the Statistical Office of the European Communities (Eurostat) each issue a press release on the quarterly b.o.p. for the euro area and the European Union (see Eurostat’s Euro-Indicators news releases). In line with the agreed allocation of responsibilities, the ECB compiles and disseminates monthly and quarterly b.o.p. statistics for the euro area, whereas Eurostat 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 Member States’ transactions and positions with residents of countries outside the euro area and outside the European Union respectively.

A complete set of updated euro area b.o.p. and i.i.p. statistics is available in the “Statistics” section of the ECB’s website under the headings “Data services”/“Latest monetary, financial markets and balance of payments statistics”.

These data, as well as the euro area data according to the composition of the euro area at the time of the reference period, can be downloaded using the ECB’s Statistical Data Warehouse (SDW).

The results will be published in the May 2007 issues of the ECB’s Monthly Bulletin and the Statistics Pocket Book.

A detailed methodological note is available on the ECB’s website.

The next quarterly press release on the euro area b.o.p. (including geographical details) and i.i.p. will be published on 17 July 2007.

Table 1a: Quarterly balance of payments of the euro area with a geographical breakdown (Q4 2006)

Table 1b: Quarterly balance of payments of the euro area with a geographical breakdown (four-quarter cumulated transactions ending in Q4 2005 and in Q4 2006)

Table 2: Quarterly balance of payments and international investment position of the euro area