Euro area monthly balance of payments (July 2015)

• In July 2015 the current account of the euro area recorded a surplus of €22.6 billion.
• In the financial account, combined direct and portfolio investment recorded an increase of €22 billion in assets and a decrease of €66 billion in liabilities.

Current account

The current account of the euro area recorded a surplus of €22.6 billion in July 2015 (see Table 1). This reflected surpluses for goods (€26.9 billion), services (€3.6 billion) and primary income (€2.8 billion), which were partly offset by a deficit in secondary income (€10.7 billion).

The 12-month cumulated current account for the period ending in July 2015 recorded a surplus of €270.8 billion (2.6% of euro area GDP), compared with a surplus of €184.4 billion (1.8% of euro area GDP) for the 12 months to July 2014 (see Table 1 and Chart 1). The increase in the current account surplus was due mainly to an increase in the surplus for goods (from €218.2 billion to €301.2 billion) and, to a lesser extent, to an increase in the surplus for primary income (from €33.8 billion to €42.4 billion) and a decrease in the deficit for secondary income (from €139.7 billion to €134.1 billion). These were only partly offset by a decrease in the surplus for services (from €72.1 billion to €61.3 billion).

Financial account

In the financial account (see Table 2) in July 2015, combined direct and portfolio investment recorded an increase of €22 billion in assets and a decrease of €66 billion in liabilities.

Euro area residents recorded an increase of €23 billion in direct investment assets, which was due to an increase in both equity (€15 billion) and debt instruments (€8 billion). Direct investment liabilities decreased by €7 billion, on account of decreases in debt instruments (€4 billion) and equity (€3 billion).

As regards portfolio investment assets, euro area residents made net sales of foreign securities in a total amount of €1 billion, owing to net sales of short-term debt securities (€8.5 billion) which were partly offset by net purchases of equity (€6 billion) and of long-term debt securities (€2 billion). The decrease of €59 billion in euro area portfolio investment liabilities was mainly due to net sales by non-euro area residents of euro area equity (€16 billion) as well as net sales/amortisations of short-term and long-term debt securities (€7 billion and €36 billion respectively).

The euro area net financial derivatives account (assets minus liabilities) recorded positive net flows of €9 billion.

Other investment recorded increases of €34 billion in assets and €79 billion in liabilities. The increase in assets was mainly driven by MFIs (excluding the Eurosystem) (€36 billion). The increase in liabilities was also explained by developments in the MFIs (excluding the Eurosystem) sector (€71 billion) and, to a lesser extent, by increases in other sectors (€7 billion) and the Eurosystem (€6 billion), which were partially compensated for by decreases in general government (€5 billion).

The Eurosystem’s stock of reserve assets decreased by €24 billion in July 2015 (to €635 billion). This was explained by net disposals of reserve assets (€7 billion) as well as negative revaluations of gold prices (€21 billion), which were partially compensated for by asset price and exchange rate developments for other reserve assets.

In the 12 months to July 2015 combined direct and portfolio investment recorded cumulated increases of €791 billion in assets and €460 billion in liabilities, compared with increases of €731 billion and €744 billion respectively in the 12 months to July 2014. This resulted from a decrease in the direct investment activity of both euro area residents abroad and non-residents in the euro area, with the latter being more pronounced, recording a reduction of liabilities from €313 billion to €225 billion. On the other hand, activity in portfolio investment showed a significant increase in the net acquisition of foreign debt securities by euro area residents, in particular long-term debt securities, and a reduction of the appetite for foreign equities. Non-euro area investors’ net purchases of euro area equity remained at similar levels, whereas euro area debt securities saw a sharp reduction in net purchases by non-euro area investors.

According to the monetary presentation of the balance of payments, the net external assets of euro area MFIs decreased by €49 billion in the 12 months to July 2015, compared with an increase of €326 billion in the preceding 12-month period. This is the first time in the last two years that a cumulated decrease has been shown by this presentation. This development in MFIs’ net external assets continued primarily to reflect a surplus of €293 billion in the current and capital account balance which, by contrast with developments in the preceding 12-month period, has in the last 12 months been more than offset by, among other things, (i) larger net purchases of portfolio investment assets by euro area non-MFI residents (€359 billion, compared with €337 billion), (ii) smaller net sales of portfolio investment liabilities by euro area non-MFI residents (€213 billion, compared with €352 billion) and (iii) an increase in the net direct investment transactions of euro area non-MFI residents (from €60 billion to €95 billion).

Data revisions

This press release incorporates revisions from the reference period April 2015 to June 2015. These revisions have not significantly altered the figures previously published.

Additional information

Time series data

Methodological information Monetary presentation of the balance of payments

Next press releases:

• Quarterly balance of payments and international investment position: 8 October 2015 (reference data up to the second quarter of 2015).
• Monthly balance of payments: 20 October 2015 (reference data up to August 2015);

Annexes

Table 1: Current account of the euro area Table 2: Balance of payments of the euro area

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