Euro area monthly balance of payments: October 2020

Current account recorded €27 billion surplus in October 2020, up from €25 billion in previous month
Current account surplus amounted to €228 billion (2.0% of euro area GDP) in 12 months to October 2020, down from €272 billion (2.3%) one year earlier
In financial account, euro area residents’ net acquisitions of foreign portfolio investment securities totalled €473 billion and non-residents’ net acquisitions of euro area portfolio investment securities totalled €344 billion in 12 months to October 2020

The current account of the euro area recorded a surplus of €27 billion in October 2020, increasing by €2 billion from the previous month (see Chart 1 and Table 1). Surpluses were recorded for goods (€35 billion) and services (€9 billion). Deficits were recorded for secondary income (€12 billion) and primary income (€5 billion).

Dataforthecurrentaccountoftheeuroarea

In the 12 months to October 2020, the current account recorded a surplus of €228 billion (2.0% of euro area GDP), compared with a surplus of €272 billion (2.3% of euro area GDP) in the 12 months to October 2019. This decline was driven by reductions in the surpluses for services (down from €69 billion to €27 billion) and for primary income (down from €55 billion to €16 billion). These developments were partly offset by a larger surplus for goods (up from €311 billion to €331 billion) and a smaller deficit for secondary income (down from €163 billion to €146 billion).

In direct investment, euro area residents made net disinvestments of €82 billion in non-euro area assets in the 12-month period to October 2020, following net disinvestments of €161 billion in the 12 months to October 2019 (see Chart 2 and Table 2). Non-residents made net investments in euro area assets of €127 billion in the 12-month period to October 2020, after net disinvestments of €75 billion in the 12 months to October 2019.

In portfolio investment, net purchases of foreign debt securities by euro area residents decreased to €288 billion in the 12-month period to October 2020, following net purchases of €329 billion in the 12 months to October 2019. Over the same period, euro area residents made net purchases of foreign equity of €185 billion, after recording net sales of €10 billion in the 12 months to October 2019. Non-residents made net purchases of euro area debt securities amounting to €183 billion in the 12 months to October 2020, following net purchases of €123 billion in the 12 months to October 2019. Over the same period, non-residents’ net purchases of euro area equity decreased to €161 billion from €251 billion in the 12 months to October 2019.

Dataforthefinancialaccountoftheeuroarea

In other investment, euro area residents’ net acquisitions of foreign assets decreased to €272 billion in the 12 months to October 2020 (following net acquisitions of €398 billion in the 12 months to October 2019), while their net incurrence of liabilities increased to €118 billion from €74 billion.

The monetary presentation of the balance of payments (see Chart 3) shows that the net external assets (enhanced) of euro area MFIs increased by €39 billion in the 12-month period to October 2020. This increase was driven by the current and capital accounts surplus and non-MFIs’ net inflows in direct investment and, to a lesser extent, portfolio investment debt securities. These developments were partly offset by euro area non-MFIs’ net outflows in other investment, portfolio investment equity and other flows.

In October 2020 the Eurosystem’s stock of reserve assets increased to €914.7 billion, up from €909.6 billion in the previous month (see Table 3). This increase was driven by net acquisitions of assets (€2.9 billion) and, to a lesser extent, by positive exchange rate changes (€1.4 billion) and price changes (€0.8 billion).