PRESS RELEASE 7 April 2020 - Euro area quarterly balance of payments and international investment position: fourth quarter of 2019
Current account surplus at €320 billion (2.7% of euro area GDP) in 2019, down from €361 billion (3.1% of GDP) in 2018.
Geographic counterparts: largest bilateral surpluses vis-à-vis the United Kingdom (€184 billion in 2019, up from €158 billion in 2018) and the United States (€111 billion, down from €133 billion), with largest deficits vis-à-vis offshore centres (€77 billion, up from €9 billion) and China (€69 billion, up from €65 billion).
International investment position at end-2019 showed net liabilities of €63 billion (below 1% of euro area GDP), after net liabilities of €153 billion at the end of the third quarter of 2019.
Current account
The current account surplus of the euro area declined to €320 billion (2.7% of euro area GDP) in 2019 from €361 billion (3.1% of euro area GDP) in 2018 (see Table 1). This decrease reflected smaller surpluses for services (down from €116 billion in 2018 to €68 billion in 2019) and primary income (down from €95 billion to €81 billion). These developments were partly offset by an increase in the surplus for goods (up from €300 billion to €322 billion), while the deficit for secondary income remained unchanged at €151 billion.
The smaller surplus in services resulted mainly from an increase in the deficit for other business services (up from €9 billion to €84 billion), triggered primarily by higher imports of research and development services. This was partially compensated by an increase in the surplus for telecommunication, computer and information services (up from €71 billion to €90 billion), which was mostly driven by higher exports.
The decrease in the primary income surplus was largely due to developments in the investment income balance (down from €65 billion to €55 billion), which mainly reflected a lower surplus in direct investment income (down from €124 billion to €117 billion) and a larger deficit for portfolio equity income (up from €100 billion to €113 billion). These developments were partly offset by a larger surplus for portfolio debt income (up from €25 billion to €37 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)
Source: ECB
Notes: “Equity” comprises equity and investment fund shares. Discrepancies between totals and their components may arise from rounding.
Data on the geographic counterparts of the euro area current account (see Chart 1) show that in 2019 the euro area recorded its largest surpluses vis-à-vis the United Kingdom (€184 billion, up from €158 billion in 2018), a residual group of other countries (€136 billion, up from €99 billion), the United States (€111 billion, down from €133 billion) and Switzerland (€57 billion, up from €55 billion). The largest bilateral deficits in the euro area current account were recorded vis-à-vis offshore centres (€77 billion, up from €9 billion) and China (€69 billion, up from €65 billion).
The most significant geographic change in the goods balance from 2018 to 2019 was the shift from a deficit of €20 billion vis-à-vis the residual group of other countries to a surplus of €11 billion. Moreover, an increase was recorded in the surplus vis-à-vis the United States (up from €154 billion to €167 billion), while the surplus vis-à-vis offshore centres declined from €63 billion to €46 billion. In services, the deficit vis-à-vis offshore centres widened from €55 billion to €111 billion. In primary income, the deficit vis-à-vis the United States increased from €3 billion to €33 billion, while the surplus vis-à-vis the United Kingdom rose from €7 billion to €26 billion.
Copyright: European Central Bank
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