Euro area monthly balance of payments (October 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

• Time-series data: the ECB’s Statistical Data Warehouse (SDW)
• Methodological information
• Monetary presentation of the balance of payments
• Next press releases:
  • quarterly balance of payments and international investment position: 11 January 2018^[2] (reference data up to the third quarter of 2017).
  • monthly balance of payments: 19 January 2018 (reference data up to November 2017)

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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