The seasonally adjusted current account of the euro area recorded a deficit of EUR 4.7 billion in March 2011. This reflected a deficit for current transfers (EUR 8.9 billion), which was partially offset by surpluses for services (EUR 3.8 billion) and goods (EUR 0.8 billion). The income account was close to balance.
Preliminary results, based on monthly data, for the first quarter of 2011 show a deficit of EUR 16.8 billion for the seasonally adjusted current account.
The 12-month cumulated seasonally adjusted current account recorded a deficit of EUR 52.2 billion in March 2011 (around 0.6% of euro area GDP), compared with a deficit of EUR 13.0 billion a year earlier. This increase resulted from a decrease in the surplus for goods (from EUR 47.4 billion to EUR 5.6 billion) and a switch in the income account from close to balance to a deficit (EUR 4.7 billion), which were partly offset by an increase in the surplus for services (from EUR 35.2 billion to EUR 42.5 billion). The deficit for current transfers remained stable.
Financial account
In the financial account, combined direct and portfolio investment recorded net inflows of EUR 70 billion in March 2011. This was due to net inflows for portfolio investment (EUR 77 billion), which were partly offset by net outflows for direct investment (EUR 7 billion).
The net outflows for direct investment resulted from net outflows both for other capital (mostly inter-company loans) and for equity capital and reinvested earnings (EUR 5 billion and EUR 1 billion respectively).
The net inflows for portfolio investment were accounted for by net inflows for both debt instruments (EUR 48 billion) and equity (EUR 29 billion). These net inflows resulted mainly from net purchases by foreign investors of both euro area debt instruments (EUR 39 billion) and euro area equity (EUR 30 billion).
The financial derivatives account recorded net inflows of EUR 1 billion.
Other investment recorded net outflows of EUR 63 billion, reflecting net outflows for MFIs excluding the Eurosystem (EUR 86 billion) and the Eurosystem (EUR 2 billion), which were partly offset by net inflows for general government (EUR 9 billion) and other sectors (EUR 17 billion).
The Eurosystem’s stock of reserve assets decreased from EUR 578 billion to EUR 573 billion in March 2011, mainly on account of revaluation effects that were partly offset by net transactions (EUR 6 billion).
In the 12-month period to March 2011, combined direct and portfolio investment recorded cumulated net inflows of EUR 219 billion, compared with net inflows of EUR 133 billion in the preceding 12-month period. This increase was mainly the result of higher net inflows for portfolio investment (up from EUR 228 billion to EUR 275 billion) and lower net outflows for direct investment (down from EUR 95 billion to EUR 56 billion). The higher net inflows for portfolio investment mainly reflected lower net purchases by euro area investors of equity issued outside the euro area.
