The working day and seasonally adjusted current account of the euro area recorded a deficit of EUR 15.3 billion in March 2008 (corresponding to a deficit of EUR 7.8 billion in non-adjusted terms). This reflected deficits in current transfers (EUR 10.8 billion), income (EUR 4.2 billion) and goods (EUR 3.9 billion), which were only partly compensated for by a surplus in services (EUR 3.6 billion).
The 12-month cumulated, working day-adjusted current account up to March 2008 was close to balance, compared with a surplus of EUR 6.5 billion a year earlier. This change resulted mainly from a shift in the income account from a surplus (EUR 7.9 billion) to a deficit (EUR 3.8 billion) and an increase in the deficit on current transfers (from EUR 78.9 billion to EUR 90.1 billion), which were only partly offset by increases in the surpluses in goods (from EUR 32.3 billion to EUR 42.3 billion) and services (from EUR 45.1 billion to EUR 52.1 billion).
Financial account
In the financial account, combined direct and portfolio investment recorded net outflows of EUR 18 billion in March 2008, reflecting net outflows in direct investment (EUR 19 billion) and net inflows in portfolio investment (EUR 1 billion).
The net outflows in direct investment resulted from net outflows both in equity capital and reinvested earnings (EUR 10 billion) and in other capital, mostly inter-company loans (EUR 9 billion).
Portfolio investment recorded net inflows in equity (EUR 5 billion), which were partly counterbalanced by net outflows in debt instruments (EUR 4 billion).
Financial derivatives recorded net inflows of EUR 7 billion.
Other investment recorded net inflows of EUR 25 billion, mainly as a result of net inflows in the Eurosystem (EUR 13 billion), MFIs excluding the Eurosystem (EUR 7 billion) and other sectors (EUR 4 billion).
Reserve assets increased by EUR 3 billion (excluding valuation effects). The stock of the Eurosystem’s reserve assets stood at EUR 356 billion at the end of March 2008.
In the 12-month period to March 2008, combined direct and portfolio investment showed cumulated net inflows of EUR 32 billion, compared with net inflows of EUR 246 billion a year earlier. This development largely resulted from a decrease in net inflows in portfolio investment (from EUR 376 billion to EUR 181 billion), which, in turn, mainly reflected lower net purchases of euro area bonds and notes by non-resident investors.
