Euro area monthly balance of payments (December 2017)

• In December 2017 the current account of the euro area recorded a surplus of €29.9 billion.^[1]
• In the financial account, combined direct and portfolio investment recorded net disposals of assets of €24 billion and of liabilities of €23 billion.

Chart 1: Balance of payments of the euro area: 12-month cumulated transactions(as a percentage of GDP)

Source: ECB

Current account

The current account of the euro area recorded a surplus of €29.9 billion in December 2017 (see Table 1). This reflected surpluses for goods (€30.9 billion), services (€7.3 billion) and primary income (€3.7 billion), which were partly offset by a deficit for secondary income (€12.0 billion).

According to the preliminary results for 2017 as a whole, the current account recorded a surplus of €391.4 billion (3.5% of euro area GDP), compared with one of €367.6 billion (3.4% of euro area GDP) in 2016 (see Table 1 and Chart 1). This development was due to increases in the surpluses for services (from €39.0 billion to €80.9 billion) and primary income (from €95.3 billion to €112.8 billion). These were partly offset by a decrease in the surplus for goods (from €373.0 billion to €348.2 billion) and an increase in the deficit for secondary income (from €139.7 billion to €150.5 billion).

Financial account

In December 2017 combined direct and portfolio investment recorded net disposals of assets of €24 billion and of liabilities of €23 billion (see Table 2).

Euro area residents recorded net disposals of €36 billion of direct investment assets as a result of net disinvestments in debt instruments (€49 billion), which were partly offset by net investments in equity (€13 billion). Direct investment liabilities decreased by €2 billion as a result of net disinvestments in euro area debt instruments (€21 billion) by non-euro area residents, which were partly offset by net acquisitions of euro area equity by non-euro area residents (€19 billion).

As regards portfolio investment assets, euro area residents made net purchases of foreign securities amounting to €12 billion. This resulted from net acquisitions of short-term debt securities (€19 billion), which were partly offset by net sales/amortisations of long-term debt securities (€5 billion) and equity (€3 billion). Portfolio investment liabilities decreased by €21 billion as a result of non-euro area residents’ net sales/amortisations of euro area short-term debt securities (€25 billion) and long-term debt securities (€15 billion), which were partly offset by net acquisitions of equity (€19 billion).

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

Other investment recorded net disposals of assets amounting to €176 billion and of liabilities of €227 billion. The net disposal of assets was mainly due to MFIs (excluding the Eurosystem) (€159 billion) and, to a lesser extent, to other sectors (€27 billion). These were partly offset by increases in assets of the Eurosystem (€10 billion). The net reduction in liabilities was mainly attributable to MFIs (excluding the Eurosystem) (€349 billion) and, to a lesser extent, to other sectors (€33 billion) and general government (€15 billion). These were partly offset by net incurrences of liabilities by the Eurosystem (€170 billion).

In 2017 as a whole, combined direct and portfolio investment recorded net acquisitions of assets of €712 billion and net incurrences of liabilities of €326 billion, compared with €804 billion and €165 billion respectively in 2016. Regarding direct investment, there was a decrease in activities of both euro area residents abroad and non-residents in the euro area, with a drop in the net acquisition of equity assets from €413 billion to €46 billion and a shift in equity liabilities, from net investments of non-euro area residents of €198 billion to net disinvestments of €39 billion. Concerning portfolio investment, on the asset side there was an increase in the net purchases of foreign equity by euro area residents from €23 billion to €176 billion. On the liabilities side, non-euro area residents increased the net purchases of euro area equities from €84 billion to €450 billion.

According to the monetary presentation of the balance of payments, the net external assets of euro area monetary financial institutions (MFIs) decreased by €72 billion in 2017, compared with a decrease of €247 billion in 2016. The large current and capital account surplus (€361 billion) would suggest an increase of net external assets of the MFIs. However, the financial counterpart of the current and capital account transactions are essentially reflected in the net financial transactions of the non-MFIs, although in a more limited manner than in 2016.

In December 2017 the Eurosystem’s stock of reserve assets decreased to €669.7 billion from €673.3 billion in the previous month (see Table 3). This decrease (€3.6 billion) was mainly due to negative exchange rate changes (€2.3 billion) and net disposals of assets (€1.6 billion), which were partly offset by positive price changes (€0.4 billion).

Data revisions

This press release incorporates revisions to the data for October and November 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:

• monthly balance of payments: 22 March 2018 (reference data up to January 2018)
• quarterly balance of payments and international investment position: 6 April 2018 (reference data up to the fourth quarter of 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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