Euro area monthly balance of payments: August 2021

Current account recorded €13 billion surplus in August 2021, down from €23 billion in previous month
Current account surplus amounted to €328 billion (2.8% of euro area GDP) in 12 months to August 2021, up from €176 billion (1.5%) one year earlier
In financial account, euro area residents’ net acquisitions of non-euro area portfolio investment securities totalled €942 billion and non-residents’ net acquisitions of euro area portfolio investment securities totalled €129 billion in 12 months to August 2021

The current account of the euro area recorded a surplus of €13 billion in August 2021, a decrease of €10 billion from the previous month (see Chart 1 and Table 1). Surpluses were recorded for goods (€17 billion) and primary income (€5 billion). These were partly offset by deficits for secondary income (€8 billion) and services (€1 billion).

Data for the current account of the euro area

In the 12 months to August 2021, the current account recorded a surplus of €328 billion (2.8% of euro area GDP), compared with a surplus of €176 billion (1.5% of euro area GDP) in the 12 months to August 2020. This increase was mainly driven by a switch in the services balance from a deficit of €32 billion to a surplus of €84 billion and also by larger surpluses for goods (up from €315 billion to €365 billion) and primary income (up from €42 billion to €49 billion). These developments were partly offset by a larger deficit for secondary income (up from €149 billion to €170 billion).

In direct investment, euro area residents made net disinvestments of €9 billion in non-euro area assets in the 12-month period to August 2021, following net investments of €21 billion in the 12 months to August 2020 (see Chart 2 and Table 2). Non-residents disinvested €37 billion from euro area assets in the 12-month period to August 2021, following net investments of €91 billion in the 12 months to August 2020.

In portfolio investment, euro area residents’ net purchases of non-euro area equity increased to €535 billion in the 12-month period to August 2021, up from €162 billion in the 12 months to August 2020. Over the same period, net purchases of non-euro area debt securities by euro area residents increased to €406 billion in the 12-month period to August 2021, up from €358 billion in the 12 months to August 2020. Non-residents made net sales of euro area debt securities amounting to €227 billion in the 12 months to August 2021, following net purchases of €260 billion in the 12 months to August 2020. Over the same period, non-residents’ net purchases of euro area equity increased to €356 billion, up from €202 billion in the 12 months to August 2020.

Data for the financial account of the euro area

In other investment, euro area residents recorded net acquisitions of non-euro area assets amounting to €48 billion in the 12 months to August 2021 (following net acquisitions of €99 billion in the 12 months to August 2020), while their net incurrence of liabilities was €593 billion (following net disposals of €55 billion in the 12 months to August 2020). This latter development partly reflects the “2021 General Allocation of Special Drawing Rights (SDRs)” as explained below.

The monetary presentation of the balance of payments (Chart 3) shows that the net external assets (enhanced) of euro area MFIs decreased by €44 billion in the 12-month period to August 2021. This decrease was mainly driven by euro area non-MFIs’ net outflows in portfolio investment debt and, to a lesser extent, in portfolio investment equity and direct investment. These developments were partially offset by the current and capital accounts surplus and by euro area non-MFIs’ net inflows in other investment and other flows.

In August 2021 the Eurosystem’s stock of reserve assets increased to €1,009.4 billion, up from €888.5 billion in the previous month (Table 3). This increase was mainly driven by net acquisitions of assets (€122.1 billion) and, to a lesser extent, by positive exchange rate changes (€0.6 billion) which were partly offset by negative changes in the price of gold (€1.6 billion). The large net acquisitions of assets reflect the “2021 General Allocation of SDRs” on the 23 August 2021 of €122.1 billion to the euro area members of the International Monetary Fund (IMF), representing about 22% of the total 2021 allocation.[1]