The seasonally adjusted current account of the euro area recorded a deficit of EUR 13.3 billion in December 2010. This reflected deficits in current transfers (EUR 8.2 billion), income (EUR 4.4 billion) and services (EUR 1.1 billion). The goods account was close to balance.
According to the preliminary results for 2010 as a whole, the seasonally adjusted current account recorded a deficit of EUR 56.4 billion (around 0.6% of euro area GDP), compared with a deficit of EUR 51.4 billion in 2009 (also around 0.6% of euro area GDP). This increase resulted from a decrease in the goods surplus (from EUR 37.0 billion to EUR 20.8 billion) and an increase in the current transfers deficit (from EUR 92.6 billion to EUR 100.7 billion), which were partly offset by a decrease in the income deficit (from EUR 28.0 billion to EUR 9.4 billion). The services surplus remained broadly unchanged.
Financial account
In the financial account, combined direct and portfolio investment recorded net inflows of EUR 57 billion in December 2010 as a result of net inflows in portfolio investment (EUR 38 billion) and in direct investment (EUR 19 billion).
The net inflows in direct investment resulted from net inflows in equity capital and reinvested earnings.
The net inflows in portfolio investment were mainly accounted for by net inflows in debt instruments (EUR 46 billion), which were partly offset by net outflows in equity (EUR 9 billion). The net inflows in debt instruments resulted both from net purchases of euro area bonds and notes by non-residents and from net sales of foreign bonds and notes by euro area residents.
The financial derivatives account recorded net inflows of EUR 3 billion.
Other investment recorded net outflows of EUR 49 billion, reflecting net outflows in MFIs excluding the Eurosystem (EUR 70 billion) and other sectors (EUR 4 billion), which were partially offset by net inflows in general government (EUR 19 billion) and in the Eurosystem (EUR 6 billion).
The Eurosystem’s stock of reserve assets decreased from EUR 597 billion to EUR 591 billion in December 2010, mainly on account of valuation effects (with transactions contributing to an increase of EUR 1 billion in the overall reserve assets position).
In 2010 as a whole, combined direct and portfolio investment recorded cumulated net inflows of EUR 111 billion, compared with net inflows of EUR 190 billion in 2009. This decrease was largely the result of lower net inflows in portfolio investment (down from EUR 265 billion to EUR 197 billion), which in turn reflected mainly lower net purchases of euro area debt securities by non-resident investors.
