Euro area monthly balance of payments (March 2016)

• In March 2016 the current account of the euro area recorded a surplus of €27.3 billion.^[1]
• In the financial account, combined direct and portfolio investment recorded increases of €74 billion in assets and €52 billion in liabilities.

Current account

The current account of the euro area recorded a surplus of €27.3 billion in March 2016 (see Table 1). This reflected surpluses for goods (€31.0 billion), services (€6.9 billion) and primary income (€2.3 billion), which were partly offset by a deficit in secondary income (€12.9 billion).

The 12-month cumulated current account for the period ending in March 2016 recorded a surplus of €322.0 billion (3.1% of euro area GDP), compared with one of €274.5 billion (2.7% of euro area GDP) for the 12 months to March 2015 (see Table 1 and Chart 1). This positive development was mostly due to an increase in the surplus for goods (from €266.8 billion to €328.0 billion) and, to a lesser extent, a decrease in the deficit for secondary income (from €139.5 billion to €131.9 billion). These were partly offset by decreases in the surpluses for both services (from €71.5 billion to €67.3 billion) and primary income (from €75.7 billion to €58.6 billion).

Financial account

In March 2016 combined direct and portfolio investment recorded increases of €74 billion in assets and €52 billion in liabilities (see Table 2).

Euro area residents recorded an increase of €26 billion in direct investment assets, driven by the increase in equity (€30 billion), which was partly offset by a decrease in debt instruments (€4 billion). Direct investment liabilities also increased, by €12 billion, as a result of increases in the investment in equity (€9 billion) and in debt instruments (€3 billion).

With reference to portfolio investment assets, euro area residents made net acquisitions of foreign securities amounting to €48 billion. This was mainly a result of net acquisitions of long-term debt securities (€35 billion) and equity (€11 billion), as well as net acquisitions of short-term debt securities, albeit to a very minor extent (€2 billion). Furthermore, portfolio investment liabilities increased by €40 billion as a result of the net acquisition of short and long-term debt securities by non-euro area residents (€13 billion and €19 billion respectively), as well as of equity issued by euro area residents (€8 billion).

The euro area net financial derivatives account (assets minus liabilities) recorded negative net flows of €8 billion.

Other investment recorded decreases of €55 billion in assets and €91 billion in liabilities. The decrease in assets was mostly attributable to the MFI sector (excluding the Eurosystem) (€89 billion) and was partly offset by an increase in other sectors (€33 billion). In a similar vein, the decrease in liabilities can mainly be explained by a decrease in the MFI sector (excluding the Eurosystem) (€113 billion), which was partly offset by increases in other sectors and the Eurosystem (€15 billion and €8 billion respectively).

In the 12 months to March 2016 combined direct and portfolio investment recorded increases of €835 billion in assets and €285 billion in liabilities, compared with increases of €896 billion and €713 billion respectively in the 12 months to March 2015. This reflected a lower acquisition of foreign assets by euro area residents in portfolio investment (€382 billion, down from €494 billion) and a shift from net acquisitions of euro area securities by non-residents (€455 billion) to net sales/amortisations (€122 billion) in portfolio investment liabilities.

Direct investment in the euro area followed a different pattern, with increases in both assets (from €402 billion to €452 billion) and liabilities (from €257 billion to €407 billion). The investment activity saw larger investment in equity, both from euro area residents (€402 billion, up from €180 billion) and non-euro area residents (€306 billion, up from €146 billion), whereas direct investment in debt instruments recorded lower increases in investment by euro area residents (€50 billion, down from €223 billion) and a slight decline in activity from non-euro area residents (€102 billion, down from €111 billion).

According to the monetary presentation of the balance of payments, the net external assets of euro area MFIs decreased by €37 billion in the 12 months to March 2016, compared with an increase of €100 billion in the 12 months to March 2015. This reflected a slight increase in the surplus in the current and capital account balance (from €279 billion to €310 billion), which was offset by, among other things, a shift from net acquisitions by non-residents of debt securities issued by euro area non-MFI residents (€128 billion) to net sales/amortisations (€89 billion).

In March 2016 the Eurosystem’s stock of reserve assets decreased by €26 billion to €673 billion (see Table 3). This can be explained by the negative revaluation of monetary gold (€15 billion) and negative exchange rate developments (€11 billion), which were partly offset by net acquisitions of reserve assets (€1 billion).

Data revisions

This press release incorporates revisions for January and February 2016. A transaction of €40 billion between a euro area multinational company and one affiliated non-resident company explains the revisions for both net direct investment and portfolio investment in January 2016. The figures offset each other and do not affect the net financial account in the same month.

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:

Monthly balance of payments: 17 June 2016 (reference data up to April 2016);

Quarterly balance of payments and international investment position: 8 July 2016 (reference data up to the first quarter of 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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