Euro area monthly balance of payments: December 2020

Current account recorded €37 billion surplus in December 2020, up from €25 billion in previous month
Current account surplus amounted to €248 billion (2.2% of euro area GDP) in 2020, down from €281 billion (2.3%) in 2019
In financial account, euro area residents’ net acquisitions of foreign portfolio investment securities totalled €644 billion in 2020 and non-residents’ net acquisitions of euro area portfolio investment securities totalled €164 billion

The current account of the euro area recorded a surplus of €37 billion in December 2020, increasing by €12 billion from the previous month (see Chart 1 and Table 1). Surpluses were recorded for goods (€38 billion), services (€11 billion) and primary income (€1 billion). These were partly offset by a deficit for secondary income (€14 billion).

Data for the current account of the euro area

In 2020 the current account recorded a surplus of €248 billion (2.2% of euro area GDP), compared with a surplus of €281 billion (2.3% of euro area GDP) in 2019. This decline was driven by reductions in the surpluses for services (down from €59 billion to €36 billion) and primary income (down from €45 billion to €28 billion), but also by a larger deficit for secondary income (up from €152 billion to €159 billion). These developments were partly offset by a larger surplus for goods (up from €328 billion to €343 billion).

In direct investment, euro area residents made net investments of €46 billion in non-euro area assets in 2020, following net investments of €25 billion in 2019 (see Chart 2 and Table 2). Non-residents made net investments in euro area assets of €166 billion in 2020, after net investments of €97 billion in 2019.

In portfolio investment, net purchases of foreign debt securities by euro area residents increased to €436 billion in 2020, from €367 billion in 2019. Similarly, net purchases of foreign equity increased to €207 billion, from €69 billion in 2019. Over the same period, non-residents’ net purchases of euro area debt securities decreased to €47 billion from €227 billion in 2019. Likewise, non-residents’ net purchases of euro area equity decreased to €117 billion from €256 billion in 2019.

Data for the financial account of the euro area

In other investment, euro area residents’ net acquisitions of foreign assets increased to €381 billion in 2020 from €239 billion in 2019, while their net incurrence of liabilities was €466 billion (following net disposals of €93 billion in 2019).

The monetary presentation of the balance of payments (see Chart 3) shows that the net external assets (enhanced) of euro area MFIs increased by €16 billion in 2020. This increase was driven by the current and capital accounts surplus, euro area non-MFIs’ net inflows in direct investment and, to a lesser extent, euro area non-MFIs’ net inflows in other flows. These developments were partly offset by euro area non-MFIs’ net outflows in portfolio investment (equity and debt securities) and in other investment.

In December 2020 the Eurosystem’s stock of reserve assets increased to €878.7 billion, from €859.4 billion in the previous month (see Table 3). This increase was mostly driven by positive gold price changes (€23.0 billion) and, to a lesser extent, by net acquisitions of assets (€1.7 billion). The increase was only partly offset by negative exchange rate changes (€5.2 billion).