The working day and seasonally adjusted current account of the euro area was close to balance in September 2007 (corresponding to a surplus of EUR 4.4 billion in non-seasonally adjusted terms). This reflected surpluses in goods (EUR 3.7 billion) and services (EUR 3.4 billion), which were offset almost in full by a deficit in current transfers (EUR 6.4 billion). The income account was balanced.
The 12-month cumulated, working day-adjusted current account up to September 2007 recorded a surplus of EUR 26.6 billion (about 0.3% of euro area GDP), compared with a deficit of EUR 21.7 billion a year earlier. This shift resulted mainly from an increase in the goods surplus (from EUR 9.3 billion to EUR 65.1 billion), which was only partly offset by a shift from surplus to deficit in the income account (from EUR 9.5 billion to EUR -4.9 billion).
Financial account
In the financial account, combined direct and portfolio investment recorded net inflows of EUR 24 billion in September 2007, reflecting net inflows in portfolio investment (EUR 46 billion) and net outflows in direct investment (EUR 23 billion).
The developments in direct investment resulted from net outflows both in equity capital and reinvested earnings (EUR 6 billion) and in other capital, mostly inter-company loans (EUR 17 billion).
The portfolio investment account recorded net inflows in both equity (EUR 21 billion) and debt instruments (EUR 25 billion). The net inflows in equity were mainly related to net purchases of euro area equity securities by non-residents. The net inflows in debt instruments predominantly concerned net sales of foreign money market instruments by euro area residents (EUR 12 billion) and net purchases of euro area money market instruments by non-residents (EUR 11 billion).
Other investment recorded net outflows of EUR 16 billion, mainly as a result of net outflows to other sectors (EUR 14 billion).
Reserve assets increased by EUR 2 billion (excluding valuation effects). At the end of September 2007 the stock of the Eurosystem’s reserve assets stood at EUR 340 billion.
In the 12-month period to September 2007, combined direct and portfolio investment showed cumulated net inflows of EUR 249 billion, compared with net outflows of EUR 16 billion a year earlier. This shift mainly reflected higher net inflows in portfolio investment (from EUR 111 billion to EUR 415 billion), which were counterbalanced to a limited extent by higher net outflows in direct investment (from EUR 127 billion to EUR 166 billion). The developments in portfolio investment were largely related to higher net purchases of euro area debt instruments by non-residents (from EUR 319 billion to EUR 547 billion).
