Euro area monthly balance of payments (May 2016)

• In May 2016 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 increases of €89 billion in assets and €42 billion in liabilities.

Current account

The current account of the euro area recorded a surplus of €30.8 billion in May 2016 (see Table 1). This reflected surpluses for goods (€30.6 billion), services (€5.9 billion) and primary income (€3.2 billion), which were partly offset by a deficit in secondary income (€8.9 billion).

The 12-month cumulated current account for the period ending in May 2016 recorded a surplus of €347.1 billion (3.3% of euro area GDP), compared with one of €289.7 billion (2.8% of euro area GDP) for the 12 months to May 2015 (see Table 1 and Chart 1). This development was mostly due to an increase in the surplus for goods (from €294.7 billion to €365.0 billion) and, to a lesser extent, to a decrease in the deficit for secondary income (from €137.9 billion to €123.3 billion). These were partly offset by decreases in the surpluses for both services (from €66.8 billion to €61.5 billion) and primary income (from €66.1 billion to €43.8 billion).

Financial account

In May 2016 combined direct and portfolio investment recorded increases of €89 billion in assets and of €42 billion in liabilities (see Table 2).

Euro area residents recorded increases of €58 billion in direct investment assets and €21 billion in direct investment liabilities. Both were due to of increases in equity (€30 billion in assets and €11 billion in liabilities) and in debt instruments (€28 billion in assets and €10 billion in liabilities).

As regards portfolio investment assets, euro area residents made net acquisitions of foreign securities amounting to €31 billion. This resulted from net acquisitions of long-term debt securities (€29 billion) and equity (€8 billion), which were partly offset by net sales/amortisations of short-term debt securities (€7 billion). Furthermore, portfolio investment liabilities increased by €21 billion as a result of the net acquisition of long-term and short-term debt securities by non-euro area residents (€13 billion and €1 billion respectively), as well as of equity issued by euro area residents (€7 billion).

The euro area net financial derivatives account (assets minus liabilities) recorded negative net flows of €2 billion.

Other investment recorded increases of €46 billion in assets and €51 billion in liabilities. The increase in assets was mostly attributable to an increase in the MFI sector (excluding the Eurosystem) (€56 billion), which was partly offset by a decrease in other sectors (€14 billion). In a similar vein, the increase in liabilities was mainly explained by an increase in the MFI sector (excluding the Eurosystem) (€51 billion).

In the 12 months to May 2016 combined direct and portfolio investment recorded increases of €970 billion in assets and €322 billion in liabilities, compared with increases of €935 billion and €687 billion respectively in the 12 months to May 2015. This reflected primarily a shift in portfolio investment liabilities from net acquisitions of euro area securities by non-residents (€378 billion) to net sales/amortisations (€137 billion).

Direct investment recorded increases in both assets (from €429 billion to €559 billion) and liabilities (from €309 billion to €459 billion). This pattern is explained by a large increase in investment in equity, from both euro area residents (€488 billion, up from €214 billion) and non-euro area residents (€419 billion, up from €182 billion). This was partly offset by a reduction in direct investment in debt instruments, from both euro area residents (€71 billion, down from €215 billion) and non-euro area residents (€40 billion, down from €127 billion).

According to the monetary presentation of the balance of payments, the net external assets of euro area MFIs decreased by €114 billion in the 12 months to May 2016, compared with an increase of €44 billion in the 12 months to May 2015. This reflected an increase in the surplus in the current and capital account balance (from €295 billion to €330 billion), which was partly offset by, among other things, developments in the portfolio investment liabilities of non-MFI euro area residents. More precisely, this is explained by a shift from net acquisitions by non-residents of debt securities issued by non-MFI euro area residents (€89 billion) to net sales/amortisations (€181 billion) and a reduction in the net purchases by non-residents of euro area equity securities from €241 billion to €71 billion.

In May 2016 the Eurosystem’s stock of reserve assets decreased by €3.9 billion to €682.7 billion (see Table 3). This was mostly explained by the negative revaluation of monetary gold (€10.9 billion), which was partly offset by positive exchange rate developments (€4.2 billion) and net acquisition of reserve assets (€3.1 billion).

Data revisions

This press release incorporates revisions for April 2016. These revisions have not significantly altered the figures previously published.

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: 18 August 2016 (reference data up to June 2016);

Quarterly balance of payments and international investment position: 7 October 2016 (reference data up to the second 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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