Euro area quarterly balance of payments and
international investment position 
(third quarter of 2016)

• The current account of the euro area showed a surplus of €344.0 billion (3.2% of euro area GDP) in the four quarters to the third quarter of 2016.
• At the end of the third quarter of 2016 the international investment position of the euro area recorded net liabilities of €0.9 trillion (approximately 8% of euro area GDP).

Current account

The current account of the euro area showed a surplus of €93.7 billion in the third quarter of 2016, compared with €94.7 billion in the same quarter of 2015 (see Table 1). The minor decrease resulted from a decrease in the surplus for primary income (from €9.6 billion to €7.5 billion) and an increase in the deficit for secondary income (from €22.6 to €32.2 billion). These were partly offset by increases in the surpluses for goods (from €88.8 billion to €93.1 billion) and services (from €18.9 billion to €25.3 billion).

The increase in the surplus for services resulted mainly from improvements in the balances for the other business services (a decrease in the deficit from €5.9 billion to €1.2 billion) and telecommunication, computer and information services (an increase in the surplus from €13.7 billion to €15.6 billion) components. This was partly offset by decreases in the surpluses for the travel (from €12.3 billion to €11.9 billion) and insurance, pension and financial services (from €4.8 billion to €3.9 billion) components.

The decrease in the primary income surplus resulted primarily from a decrease in the investment income surplus for direct investment (from €19.1 billion to €15.2 billion).

In the four quarters to the third quarter of 2016 the current account of the euro area showed a surplus of €344.0 billion (3.2% of euro area GDP), compared with one of €314.4 billion (3.0% of euro area GDP) a year earlier. The rise resulted from an increase in the surplus for goods (from €331.4 billion to €377.4 billion) and a decrease in the deficit for secondary income (from €135.5 billion to €128.3 billion). These developments were partly offset by a decrease in the surplus for primary income (from €55.6 billion to €31.8 billion). The surplus for services remained broadly unchanged.

International investment position

At the end of the third quarter of 2016 the international investment position of the euro area recorded net liabilities of €0.9 trillion vis-à-vis the rest of the world (approximately 8% of euro area GDP; see Chart 1). This represented an improvement of €70 billion in the net international investment position compared with the second quarter of 2016 (see Table 2).

This improvement resulted from a higher net asset position for direct investment (€1,693 billion, up from €1,610 billion), lower net liability positions for portfolio investment (€2,598 billion, down from €2,716 billion) and financial derivatives (€49 billion, down from €54 billion), and an increase in reserve assets (€727 billion, up from €722 billion). These movements were partly offset by a higher net liability position for other investment (€639 billion, up from €499 billion).

This improvement in the net international investment position of the euro area in the third quarter of 2016 can be explained by financial transactions, partially offset by negative revaluations – due to exchange rate and asset price changes – and other volume changes (see Chart 2). Negative revaluations due to exchange rate changes have been recorded for virtually all asset and liability components, but have been larger on the asset side. In direct investment assets, the net negative revaluations were partially offset by positive net investments and other volume changes, while in direct investment liabilities the negative revaluations were reinforced by net disinvestments. The increases in portfolio investment assets and liabilities resulted primarily from positive price developments, which were reinforced by net purchases on the asset side and partially offset by net sales/amortisations on the liability side.

At the end of the third quarter of 2016 the gross external debt of the euro area amounted to €13.4 trillion (approximately 125% of euro area GDP), which represents a decrease of €17 billion compared with the previous quarter. The net external debt decreased by €110 billion owing to an increase in external debt assets.

Data revisions

This press release incorporates revisions to the data for all the reference periods between the first quarter of 2015 and the second quarter of 2016. These revisions were particularly sizeable for direct and portfolio investment in the second quarter of 2016. They primarily reflect improvements in the national contributions to the euro area aggregates.

Additional information

• Time series data: ECB’s Statistical Data Warehouse (SDW).
• Methodological information.
• Next press releases:
  • Monthly balance of payments: 19 January 2017 (reference data up to November 2016).
  • Quarterly balance of payments and international investment position: 6 April 2017 (reference data up to the last quarter of 2016)

Annexes

• Table 1: Current account of the euro area
• Table 2: International investment position of the euro area

For media enquiries, please contact Rocío González, Tel.: +49 69 1344 6451.