The current account of the euro area recorded a surplus of €25.4 billion in January 2016. This reflected surpluses for goods (€27.6 billion), primary income (€4.7 billion) and services (€3.6 billion), which were partly offset by a deficit in secondary income (€10.5 billion).
The 12-month cumulated current account for the period ending in January 2016 recorded a surplus of €316.1 billion (3.0% of euro area GDP), compared with one of €254.5 billion (2.5% of euro area GDP) for the 12 months to January 2015 (see Table 1 and Chart 1). The increase in the current account surplus was largely due to an increase in the surplus for goods (from €260.7 billion to €320.2 billion) and, to a lesser extent, a decrease in the deficit for secondary income (from €139.0 billion to €131.0 billion) and an increase in the surplus for primary income (from €63.7 billion to €65.7 billion). These were partly offset by a decrease in the surplus for services (from €69.0 billion to €61.1 billion).
In January 2016 combined direct and portfolio investment recorded decreases of €8 billion in assets and €54 billion in liabilities.
Euro area residents recorded an increase of €8 billion in direct investment assets, as a result of an increase in equity (€15 billion), which was partly offset by a decrease in debt instruments (€8 billion). Direct investment liabilities decreased by €8 billion, on account of the decrease in debt instruments (€18 billion), which was partly offset by an increase in equity (€10 billion).
As regards portfolio investment assets, euro area residents made net sales of foreign securities amounting to €15 billion. This resulted from net sales of short-term debt securities (€39 billion) and, to a lesser extent, equity (€2 billion). These were partly offset by net acquisitions of long-term debt securities (€25 billion). The decrease of €45 billion in euro area portfolio investment liabilities was due to non-euro area residents’ net sales/amortisations of both equity and long-term debt securities issued by euro area residents (€42 billion and €12 billion respectively), which were partly offset by net acquisitions of short-term debt securities (€8 billion).
The euro area net financial derivatives account (assets minus liabilities) recorded positive net flows of €10 billion.
Other investment recorded increases of €140 billion in assets and €212 billion in liabilities. These were largely driven by similar increases in the MFI sector (excluding the Eurosystem).
The Eurosystem’s stock of reserve assets increased by €15 billion in January 2016 (to €659 billion). This can mainly be attributed to positive revaluations of gold prices (€17 billion), which were partly offset by net sales of reserve assets (€1 billion) and by asset price and exchange rate developments for other reserve assets.
In the 12 months to January 2016 combined direct and portfolio investment recorded cumulated increases of €701 billion in assets and €290 billion in liabilities, compared with increases of €658 billion and €558 billion respectively in the 12 months to January 2015. This resulted from a large increase in the direct investment activity of both euro area residents abroad and non-residents in the euro area, with the net acquisition of assets increasing from €176 billion to €388 billion and the net incurrence of liabilities increasing from €132 billion to €332 billion.
The developments in portfolio investment were quite different. The net acquisition of foreign securities by euro area residents decreased from €482 billion to €313 billion, mainly as a result of a decrease in the net acquisition of equity (from €125 billion to €10 billion). On the liability side, the net acquisition of euro area securities by non-residents (€426 billion) shifted to net sales (€42 billion), which can be explained by the combination of lower acquisitions of equity (€129 billion, down from €321 billion), an increase in the net sales of short-term debt securities (from €37 billion to €87 billion) and a shift in long-term debt securities from net acquisitions (€142 billion) to net sales (€84 billion).
According to the monetary presentation of the balance of payments, the net external assets of euro area MFIs decreased by €65 billion in the 12 months to January 2016, compared with an increase of €168 billion in the 12 months to January 2015. This development in MFIs’ net external assets continued to primarily reflect the surplus in current and capital account balance, which has in the last 12 months been offset by, among other things, a shift from net acquisitions by non-residents of debt securities issued by euro area non-MFI residents (€104 billion) to net sales/amortisation (€83 billion) and a decrease from €241 billion to €110 billion in net acquisitions by non-residents of euro area equity.