Euro area monthly balance of payments: July 2022

20 September 2022

• Current account recorded €20 billion deficit in July 2022, down from €4 billion surplus in previous month
• Current account surplus amounted to €63 billion (0.5% of euro area GDP) in 12 months to July 2022, down from €370 billion (3.1%) one year earlier
• In financial account, euro area residents’ net acquisitions of non-euro area portfolio investment securities totalled €74 billion and non-residents’ net sales of euro area portfolio investment securities totalled €138 billion in 12 months to July 2022

Chart 1

Euro area current account balance

(EUR billions unless otherwise indicated; working day and seasonally adjusted data)

The current account of the euro area recorded a deficit of €20 billion in July 2022, a decrease of €24 billion from the previous month (Chart 1 and Table 1). Deficits were recorded for goods (€18 billion) and secondary income (€15 billion). These were partly offset by surpluses for services (€10 billion) and primary income (€3 billion).

Table 1

Current account of the euro area

(EUR billions unless otherwise indicated; transactions; working day and seasonally adjusted data)

In the 12 months to July 2022, the current account recorded a surplus of €63 billion (0.5% of euro area GDP), compared with a surplus of €370 billion (3.1% of euro area GDP) in the 12 months to July 2021.

This decline was predominantly driven by a reduction in the surplus for goods (down from €383 billion to €60 billion) and, to a lesser extent, by a smaller surplus for primary income (down from €65 billion to €31 billion). This development was partly offset by a larger surplus for services (up from €83 billion to €132 billion) and a smaller deficit for secondary income (down from €161 billion to €160 billion).

Chart 2

Selected items of the euro area financial account

(EUR billions; 12-month cumulated data)

In direct investment, euro area residents made net investments of €114 billion in non-euro area assets in the 12-month period to July 2022, following net investments of €7 billion in the 12 months to July 2021 (Chart 2 and Table 2). Non-residents disinvested €100 billion in net terms from euro area assets in the 12-month period to July 2022, following net disinvestments of €26 billion in the 12 months to July 2021.

In portfolio investment, euro area residents switched from net purchases of non-euro area equity of €554 billion in the 12 months to July 2021 to net sales of €55 billion in the 12 months to July 2022. Over the same period, euro area residents’ net purchases of non-euro area debt securities decreased to €129 billion, down from €428 billion in the 12 months to July 2021. Non-residents’ net purchases of euro area equity decreased to €112 billion in the 12-month period to July 2022, down from €344 billion in the 12 months to July 2021. Over the same period, non-residents made net sales of euro area debt securities amounting to €249 billion, following net sales of €241 billion in the 12 months to July 2021.

Table 2

Financial account of the euro area

(EUR billions unless otherwise indicated; transactions; non-working day and non-seasonally adjusted data)

In other investment, euro area residents recorded net acquisitions of non-euro area assets amounting to €377 billion in the 12 months to July 2022 (following net acquisitions of €45 billion in the 12 months to July 2021), while their net incurrence of liabilities increased to €858 billion (up from €453 billion in the 12 months to July 2021).

Chart 3

Monetary presentation of the balance of payments

(EUR billions; 12-month cumulated data)

The monetary presentation of the balance of payments (Chart 3) shows that the net external assets (enhanced) of euro area MFIs decreased by €168 billion in the 12-month period to July 2022. This decrease was mainly driven by euro area non-MFIs’ net outflows in direct investment, portfolio investment debt and, to a lesser extent, other investment. These developments were partly offset by the current and capital accounts surplus and by euro area non-MFIs’ net inflows in portfolio investment equity.

In July 2022 the Eurosystem’s stock of reserve assets increased to €1,129.1 billion, up from €1,122.1 billion in the previous month (Table 3). This increase was driven mostly by positive exchange rate changes (€9.4 billion) and, to a lesser extent, by net acquisitions of assets (€1.6 billion) that were partially offset by negative price changes (€3.9 billion).

Table 3

Reserve assets of the euro area

(EUR billions; amounts outstanding at the end of the period, flows during the period; non-working day and non-seasonally adjusted data)

Data revisions

This press release does not incorporate revisions to the data for previous periods.

Next releases:

• Quarterly balance of payments and international investment position: 5 October 2022 (reference data up to the second quarter of 2022)
• Monthly balance of payments: 20 October 2022 (reference data up to August 2022)

For media queries, please contact Philippe Rispal, tel.: +49 69 1344 5482.

Notes

• Current account data are always seasonally and working day-adjusted, unless otherwise indicated, whereas capital and financial account data are neither seasonally nor working day-adjusted.
• Hyperlinks in this press release lead to data that may change with subsequent releases as a result of revisions.