Euro area quarterly balance of payments and international investment position (first quarter of 2017)

• The current account of the euro area showed a surplus of €374.1 billion (3.5% of euro area GDP) in the four quarters to the first quarter of 2017.^[1]
• At the end of the first quarter of 2017 the international investment position of the euro area recorded net liabilities of €0.4 trillion (approximately 3% of euro area GDP).

Current account

The current account of the euro area showed a surplus of €69.8 billion in the first quarter of 2017, compared with €68.6 billion in the same quarter of 2016 (see Table 1). The modest increase in the current account surplus was due to increases in the surpluses for services (from €9.6 billion to €11.6 billion) and primary income (from €24.3 billion to €24.6 billion) and a decrease in the deficit for secondary income (from €46.6 billion to €38.2 billion), which were partly offset by a decrease in the surplus for goods (from €81.4 billion to €71.8 billion).

The increase in the surplus for services resulted primarily from an improvement in the balances for the transport (an increase in the surplus from €0.6 billion to €1.5 billion), travel (an increase in the surplus from €2.1 billion to €2.8 billion) and telecommunication, computer and information services (an increase in the surplus from €14.6 billion to €17.0 billion) components. This was partly offset by a deterioration in the balance for the other business services component (an increase in the deficit from €2.2 billion to €6.1 billion).

In the four quarters to the first quarter of 2017 the current account of the euro area showed a surplus of €374.1 billion (3.5% of euro area GDP), compared with one of €348.2 billion (3.3% of euro area GDP) a year earlier. The rise resulted from increases in the surpluses for goods (from €357.7 billion to €366.4 billion) and primary income (from €50.1 billion to €90.5 billion). These developments were partly offset by a decrease in the surplus for services (from €69.8 billion to €46.7 billion). The deficit for secondary income remained broadly unchanged at €129.5 billion.

International investment position

At the end of the first quarter of 2017 the international investment position of the euro area recorded net liabilities of €0.4 trillion vis-à-vis the rest of the world (approximately 3% of euro area GDP; see Chart 1). This represented an improvement of around €295 billion compared with the net position at the end of 2016 (see Table 2).

This change resulted from improvements in all international investment position components. Higher net asset positions were recorded for direct investment (€2,054 billion, up from €1,864 billion) and reserve assets (€727 billion, up from €708 billion), while lower net liability positions were recorded for portfolio investment (€2,378 billion, down from €2,440 billion), other investment (€712 billion, down from €733 billion) and financial derivatives (€51 billion, down from €54 billion).

The improvement in the net international investment position of the euro area in the first quarter of 2017 can be primarily explained by net positive revaluations due to exchange rate and asset price changes. However, transactions and other volume changes, mainly related to reclassifications and changes in data coverage, have also contributed positively to this development (see Chart 2). In direct and portfolio investments, changes in assets and liabilities were mainly driven by net investments and positive revaluations due to price changes. In other investment, net investments and positive revaluations due to exchange rate changes explained the increases in assets and liabilities.

At the end of the first quarter of 2017 the gross external debt of the euro area amounted to €14.0 trillion (approximately 129% of euro area GDP), which represents an increase of around €344 billion compared with the previous quarter. On the contrary, net external debt decreased (by approximately €316 billion) owing to an even larger increase in external assets in debt instruments.

Data revisions

This press release incorporates revisions to the data for the reference periods from the first quarter of 2016 to the last quarter of 2016. They had an impact throughout the accounts, particularly visible in foreign direct investment including the respective income component.

Additional information

Time series data: ECB’s Statistical Data Warehouse (SDW).

Methodological information Next press releases:

• Monthly balance of payments: 20 July 2017 (reference data up to May 2017).
• Quarterly balance of payments and international investment position: 4 October 2017 (reference data up to the second quarter of 2017).

Annexes

Table 1: Current account of the euro area

Table 2: International investment position of the euro area

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