Chapter News

Euro area quarterly balance of payments and international investment position (first quarter of 2015)

  • The current account of the euro area showed a surplus of €238.2 billion (2.3% of euro area GDP) in the four quarters to the first quarter of 2015.
  • At the end of the first quarter of 2015 the international investment position of the euro area recorded net liabilities of €1.3 trillion (approximately 13% of euro area GDP).

Current account

The current account of the euro area showed a surplus of €54.5 billion in the first quarter of 2015, compared with €23.0 billion in the last quarter of 2014 (see Table 1). The increase in the current account surplus was due to increases in the surpluses for goods (from €44.9 billion to €67.2 billion) and primary income (from €15.8 billion to €28.0 billion). These increases were partly offset by a decrease in the surplus for services (from €12.5 billion to €9.8 billion) and by a marginal increase in the deficit for secondary income (from €50.2 to €50.5 billion). [1]

The decrease in the surplus for services was mainly a result of a deterioration in the balances for the travel (a decrease in the surplus from €2.0 billion to €1.1 billion) and “other” (an increase in the deficit from €4.0 billion to €7.9 billion) components. This was partly offset by an improvement in the balance for the telecommunication, computer and information services component, where the surplus rose from €10.0 billion to €12.0 billion.

All components contributed to an increase in the primary income surplus, particularly the increase in the investment income surplus for direct investment.

International investment position

At the end of the first quarter of 2015 the international investment position of the euro area recorded net liabilities of €1.3 trillion vis-à-vis the rest of the world (approximately 13% of euro area GDP; see Chart 1). This represented a decrease of €102 billion in net liabilities compared with the last quarter of 2014 (see Table 2).

This decrease was the result of (i) higher net asset positions for direct investment (€1,873 billion, up from €1,570 billion) and reserve assets (€603 billion, up from €534 billion) and (ii) lower net liability positions for other investment (€25 billion, down from €52 billion) and financial derivatives (€21 billion, down from €44 billion). These developments were partly offset by an increase in the net liability position for portfolio investment (from €3,406 billion to €3,724 billion).

The change in the net international investment position of the euro area was broadly explained by revaluations – changes in exchange rates and asset prices – and other volume changes. Whereas the increases in portfolio investment and direct investment for both assets and liabilities were explained by transactions and other changes; other changes (mainly exchange rate effects) were mainly responsible for the developments in reserve assets. The increases in other investment assets and liabilities were mainly attributed to transactions (see Chart 2).

At the end of first quarter of 2015 the gross external debt of the euro area amounted to €12.6 trillion (approximately 124% of euro area GDP), which represented an increase of over €760 billion compared with the previous quarter. By contrast, the net external debt decreased by approximately €170 billion on account of a more marked increase in euro area residents’ holdings of (debt) assets issued by non-residents.

Data revisions

  • This press release incorporates revisions to the data for the reference periods between the first quarter of 2013 and the last quarter of 2014. These revisions reflect improvements in the national contributions to the euro area aggregates.

Additional information

Annexes

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[1]In broad terms, the new BPM6 concept of “primary income” corresponds to the old BPM5 concept of “income”, and the new concept of “secondary income” corresponds to the old concept of “current transfers”.

Compliments of the European Central Bank