Euro area quarterly balance of payments and international investment position: third quarter of 2021 (1 MB)

Statistical release

11 January 2022

Euro area quarterly balance of payments and international investment position:

third quarter of 2021

• Current accountsurplus at €333 billion (2.8% of euro area GDP) in four quarters to third quarter of 2021, up from €180 billion (1.6% of GDP) a year earlier
• Geographic counterparts: largest bilateral current account surpluses vis-à-visUnited Kingdom (€175 billion) and Switzerland (€76 billion), largest deficit vis-à-visChina (€69 billion)
• International investment positionshowed net liabilities of €271 billion (2.3% of euro area GDP) at end of third quarter of 2021

Current account

The current account surplus of the euro area increased to €333 billion (2.8% of euro area GDP) in the four quarters to the third quarter of 2021, up from €180 billion (1.6% of GDP) a year earlier (Table 1). This increase reflected a shift in the services balance from a deficit of €45 billion to a surplus of

€91 billion, a larger surplus for goods (from €320 billion to €360 billion) and slightly larger surplus for primary income (from €50 billion to €52 billion). These developments were partly offset by a larger deficit for secondary income (from €146 billion to €169 billion).

The developments in services were mainly due to a reduction in the deficit for other business services (from €165 billion to €32 billion) and, to a lesser extent, an increase in the surpluses for telecommunication, computer and information services (from €95 billion to €121 billion) and transport services (from €10 billion to €19 billion). Conversely, the deficit for other services increased (from €15 billion to €41 billion) and a lower surplus was recorded for insurance, pension and financial services (from €16 billion to €10 billion).

European Central Bank

Directorate General Statistics

Sonnemannstrasse 20, 60314 Frankfurt am Main, Germany

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Reproduction is permitted provided that the source is acknowledged.

Statistical release / 11 January 2022

The slight increase in the primary income surplus was driven by a larger surplus for investment income (from €21 billion to €25 billion). This primarily reflected a smaller deficit for portfolio equity income (down from €78 billion to €62 billion), and larger surpluses for portfolio debt income (up from

€41 billion to €49 billion) and other investment income (up from €7 billion to €14 billion). These increases were partly offset by a lower surplus for direct investment income (down from €46 billion to €20 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 for the current account of the euro area

Data on the geographic counterparts of the euro area current account (Chart 1) show that in the four quarters to the third quarter of 2021 the euro area recorded its largest bilateral surpluses vis-à-vis the United Kingdom (€175 billion, up from €165 billion a year earlier), Switzerland (€76 billion, up from €56 billion) and the United States (€61 billion, down from €85 billion). It also recorded a current

European Central Bank

Directorate General Statistics

Sonnemannstrasse 20, 60314 Frankfurt am Main, Germany

Statistical information request, website:www.ecb.europa.eu

Reproduction is permitted provided that the source is acknowledged.

Statistical release / 11 January 2022

account surplus vis-à-vis a residual group of other countries (€168 billion, up from €162 billion). The largest bilateral deficits were recorded vis-à-visChina (€69 billion, down from €80 billion), EU Member States and EU institutions outside the euro area (€53 billion, up from €25 billion) and offshore centres (€24 billion, down from €175 billion).

The most significant geographic changes in the four quarters to the third quarter of 2021 relative to the previous year in the components of the current account were as follows. In the goods balance there were increases in the surpluses vis-à-vis the United States (from €157 billion to €183 billion) and the United Kingdom (from €97 billion to €110 billion), while the surplus vis-à-vis the residual group of other countries decreased (from €67 billion to €51 billion). In services the deficit vis-à-visoffshore centres declined strongly (from €152 billion to €16 billion) and the surplus vis-à-vis the residual group of other countries increased (from €68 billion to €94 billion), while the deficit vis-à-vis the United States increased (from €61 billion to €101 billion). In primary income, a larger deficit was recorded vis-à-vis the United States (from €9 billion to €21 billion), while the surplus vis-à-vis Switzerland increased (from €11 billion to €21 billion). In secondary income the deficit vis-à-vis the EU Member States and EU institutions outside the euro area widened from €80 billion to €103 billion, driven by euro area governments' contributions to the EU budget.

Chart 1

Geographical breakdown of the euro area current account balance

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

Source: ECB.

Note: "EU non-EA" comprises the non-euro area EU Member States and those EU institutions and bodies that are considered for statistical purposes as being outside the euro area, such as the European Commission and the European Investment Bank. "Other countries" includes all countries and country groups not shown in the chart, as well as unallocated transactions.

European Central Bank

Directorate General Statistics

Sonnemannstrasse 20, 60314 Frankfurt am Main, Germany

Statistical information request, website:www.ecb.europa.eu

Reproduction is permitted provided that the source is acknowledged.

Statistical release / 11 January 2022

Data for the geographical breakdown of the euro area current account

International investment position

At the end of the third quarter of 2021 the international investment position of the euro area recorded net liabilities of €271 billion vis-à-vis the rest of the world (2.3% of euro area GDP), decreasing from €386 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)

Source: ECB.

Data for the net international investment position of the euro area

This decline in net liabilities of €114 billion reflected large but partly offsetting changes in the various investment components. Larger net assets were recorded for direct investment (€2,212 billion, up from €1,954 billion) and portfolio debt (€1,260 billion, up from €1,131 billion), while net liabilities increased in portfolio equity (€3,349 billion, up from €3,122 billion) and other investment (€1,305 billion, up from €1,093 billion).

European Central Bank

Directorate General Statistics

Sonnemannstrasse 20, 60314 Frankfurt am Main, Germany

Statistical information request, website:www.ecb.europa.eu

Reproduction is permitted provided that the source is acknowledged.

Statistical release / 11 January 2022

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)

Source: ECB.

Notes: "Equity" comprises equity and investment fund shares. Net financial derivatives are reported under assets. Discrepancies between totals and their components may arise from rounding.

Data for the international investment position of the euro area

The developments in the euro area's net international investment position in the third quarter of 2021 were mainly driven by positive net flows owing to transactions and exchange rate changes, which were partly offset by negative net price changes (Table 2 and Chart 3).

The increase in net assets for direct investment was due to a combination of positive net flows in transactions, exchange rate changes, price changes and other volume changes (Table 2), while the increase in net assets for portfolio debt was mainly driven by positive net flows in transactions and exchange rate changes. Larger net liabilities for portfolio equity and other investment were largely driven by negative net transactions, which for portfolio equity were compounded by negative net flows owing to price changes and other volume changes.

European Central Bank

Directorate General Statistics

Sonnemannstrasse 20, 60314 Frankfurt am Main, Germany

Statistical information request, website:www.ecb.europa.eu

Reproduction is permitted provided that the source is acknowledged.