Euro area quarterly balance of payments and international investment position:
first quarter of 2024

04 July 2024

• Current account surplus at €307 billion (2.1% of euro area GDP) in four quarters to first quarter of 2024, after €33 billion deficit (0.2% of GDP) a year earlier.
• Goods trade showed deficit in energy products of €299 billion in four quarters to first quarter of 2024, declining from €530 billion a year earlier.
• Geographical counterparts: largest bilateral current account surpluses vis-à-vis United Kingdom (€218 billion) and Switzerland (€59 billion) and largest deficits vis-à-vis China (€109 billion) and United States (€36 billion).
• International investment position showed net assets of €592 billion (4.1% of euro area GDP) at end of first quarter of 2024.

Current account

The current account of the euro area recorded a surplus of €307 billion (2.1% of euro area GDP) in the four quarters to the first quarter of 2024, after recording a deficit of €33 billion (0.2% of GDP) a year earlier (Table 1). This development was mainly driven by a shift from a deficit (€43 billion) to a surplus (€305 billion) for goods and, to a lesser extent, by a decrease in the deficit for secondary income from €169 billion to €164 billion. These developments were partly offset by reductions in the surpluses for services (from €136 billion to €128 billion) and for primary income (from €43 billion to €37 billion).

Newly released estimates on goods trade broken down by product group show that, in the four quarters to the first quarter of 2024, the shift in the goods balance from a deficit to a surplus was due mainly to a smaller deficit in energy products (from €530 billion to €299 billion). In addition, the surplus for machinery and manufactured products increased from €207 billion to €300 billion, while the deficit for other products declined from €39 billion to €3 billion.

The lower surplus for services was mainly due to a change from a surplus of €22 billion to a deficit of €1 billion for transport and widening deficits for other business services (from €52 billion to €63 billion) as well as for other services (from €50 billion to €62 billion). This was partly offset by larger surpluses for telecommunication, computer and information (from €151 billion to €172 billion) and for travel (from €47 billion to €58 billion).

The decrease in the primary income surplus was mainly due to a larger deficit in portfolio equity (from €122 billion to €160 billion), partly offset by a larger surplus in direct investment (from €69 billion to €94 billion).

Table 1

Current account of the euro area

(EUR billions, unless otherwise indicated; transactions during the period; non-working day and non-seasonally adjusted)

Data on the geographical counterparts of the euro area current account (Chart 1) show that in the four quarters to the first quarter of 2024, the euro area recorded its largest bilateral surpluses vis-à-vis the United Kingdom (€218 billion, up from €162 billion a year earlier) and Switzerland (€59 billion, down from €85 billion). It also recorded a surplus vis-à-vis the residual group of other countries of €140 billion, after a €39 billion deficit a year earlier. The largest bilateral deficits were recorded vis-à-vis China (€109 billion, down from €154 billion a year earlier) and the United States (€36 billion, down from €52 billion).

The most significant changes in the geographical components of the current account in the four quarters to the first quarter of 2024 relative to the previous year were as follows. The goods balance vis-à-vis Russia shifted from a deficit (€70 billion) to a surplus (€3 billion), while the deficit vis-à-vis China declined from €182 billion to €124 billion. Furthermore, the deficit vis-à-vis the residual group of other countries shifted from a deficit (€185 billion) to a surplus (€13 billion), which was partly due to a smaller deficit with Norway (from €77 billion to €31 billion) and a shift from a deficit (€8 billion) to a surplus (€5 billion) vis-à-vis Saudi Arabia. The surplus in goods vis-à-vis EU Member States and EU institutions outside the euro area decreased from €48 billion to €25 billion, while it increased vis-à-vis the United Kingdom (from €103 billion to €140 billion) and the United States (from €175 billion to €196 billion).

In services, the deficit vis-à-vis the United States increased (from €115 billion to €131 billion), while the deficit vis-à-vis Offshore centres declined from €14 billion to €2 billion. In primary income, there were recorded shifts from a surplus (€21 billion) to a deficit (€2 billion) vis-à-vis Switzerland, and from a deficit (€17 billion) to a surplus (€4 billion) vis-à-vis Offshore centres. The deficit in secondary income vis-à-vis the EU Member States and EU institutions outside the euro area decreased (from €81 billion to €74 billion).

Chart 1

Geographical breakdown of the euro area current account balance

(four-quarter moving sums in EUR billions; non-seasonally adjusted)

International investment position

At the end of the first quarter of 2024, the international investment position of the euro area recorded net assets of €592 billion vis-à-vis the rest of the world (4.1% of euro area GDP), up from €348 billion in the previous quarter (Chart 2 and Table 2).

Chart 2

Net international investment position of the euro area

(net amounts outstanding at the end of the period as a percentage of four-quarter moving sums of GDP)

The €244 billion increase in net assets was mainly driven by larger net assets in direct investment (up from €2.24 trillion to €2.45 trillion). Moreover, larger net assets were recorded in reserve assets (up from €1.15 trillion to €1.22 trillion) and in portfolio debt (up from €1.18 trillion to €1.22 trillion), while lower net liabilities were recorded in other investment (down from €0.79 trillion to €0.75 trillion). These developments were partly offset by an increase in net liabilities in portfolio equity (from €3.41 trillion to €3.52 trillion).

Table 2

International investment position of the euro area

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

The developments in the euro area’s net international investment position in the first quarter of 2024 were driven mainly by transactions and positive net flows due to other volume changes and exchange rate changes which were partly offset by price changes (Table 2 and Chart 3).

At the end of the first quarter of 2024, direct investment assets of special purpose entities (SPEs) amounted to €3.34 trillion (27% of total euro area direct investment assets), up from €3.24 trillion at the end of the previous quarter (Table 2). Over the same period, direct investment liabilities of SPEs increased from €3.06 trillion to €3.15 trillion (32% of total direct investment liabilities).

At the end of the first quarter of 2024 the gross external debt of the euro area amounted to €16.54 trillion (114% of euro area GDP), up by €489 billion compared with the previous quarter.

Chart 3

Changes in the net international investment position of the euro area

(EUR billions; flows during the period; non-working day and non-seasonally adjusted)

Publication of data on goods trade by product group

With this statistical release, additional details on goods trade by product group are disseminated for the first time. The breakdowns presented in Table 1 of this release are estimated using granular data from international trade in goods statistics for the EU (provided by Eurostat) based on the standard international trade classification. Further details on the estimation methodology are described in the ECB’s Economic Bulletin.

Data revisions

This statistical release incorporates revisions to the data for the reference periods between the first quarter of 2020 and the fourth quarter of 2023. The revisions reflect revised national contributions to the euro area aggregates as a result of the incorporation of newly available information - including from major regular revisions - by a number of euro area countries.

Next releases

• Monthly balance of payments: 19 July 2024 (reference data up to May 2024)
• Quarterly balance of payments and international investment position: 4 October 2024 (reference data up to the second quarter of 2024)

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Notes

• Data are neither seasonally nor working day-adjusted. Ratios to GDP (including in the charts) refer to four-quarter sums of non-seasonally and non-working day-adjusted GDP figures.
• Hyperlinks in this press release lead to data that may change with subsequent releases as a result of revisions.