- 听surplus at 鈧�250 billion (2.2% of euro area GDP) in 2020, down from 鈧�280 billion (2.3% of GDP) in 2019
- : largest bilateral surpluses vis-脿-vis听United Kingdom听(鈧�151 billion) and听United States听(鈧�79 billion), with largest deficits vis-脿-vis听offshore centres听(鈧�94 billion) and听China听(鈧�79 billion)
- 听showed net assets of 鈧�91 billion (around 0.8% of euro area GDP) at end of 2020
Current account
罢丑别听current account听surplus of the听euro area declined to 鈧�250 billion (2.2% of euro area GDP) in 2020, from 鈧�280 billion (2.3% of GDP) in 2019 (see Table听1). This decrease reflected a reduction in the surpluses for听services听(from 鈧�60听billion to 鈧�31 billion) and听primary income听(from 鈧�50听billion to 鈧�41听billion), and a larger deficit for听secondary income, which increased from 鈧�152听billion to 鈧�162听billion.听These developments were partly offset by an increase in the surplus for听goods听(from 鈧�323听billion to 鈧�340听billion).
The smaller surplus for听services听was mainly due to a decline in the surpluses for听travel services听(from 鈧�42 billion to 鈧�8 billion) and听transport services听(from 鈧�20 billion to 鈧�10 billion) and a larger deficit for听other services听(up from 鈧�9 billion to 鈧�30 billion). These developments were partly offset by a decline in the deficit for听other business services听(from 鈧�102 billion to 鈧�69 billion) and an increase in the surplus for听telecommunication, computer and information services听(from 鈧�94 billion to 鈧�102听billion). The decrease in the听primary income听surplus was due to a fall in the surplus for听investment income听(from 鈧�22 billion to 鈧�9 billion). This reflected mainly a lower surplus for听direct investment income听(down from 鈧�84 billion to 鈧�27 billion), which was partly offset by a smaller deficit for听portfolio equity income听(down from 鈧�112 billion to 鈧�73 billion) and a larger surplus for听portfolio debt income听(up from 鈧�35 billion to 鈧�41 billion).
Data on the geographic counterparts of the euro area current account (see Chart 1) show that in 2020 the euro area recorded its largest bilateral surpluses vis-脿-vis the听United Kingdom听(鈧�151 billion, down from 鈧�197 billion in 2019), the听United States听(鈧�79 billion, down from 鈧�107 billion) and听Switzerland听(鈧�54 billion, down from 鈧�65 billion). It also recorded a current account surplus vis-脿-vis a residual group of听other countries听(鈧�187 billion, up from 鈧�128 billion). The largest bilateral deficits were recorded vis-脿-vis听offshore centres听(鈧�94 billion, down from 鈧�115 billion) and听China听(鈧�79 billion, up from 鈧�65 billion).
The most significant geographic changes in 2020 relative to 2019 were as follows. In the听goods听balance there were decreases in the surpluses vis-脿-vis听offshore centres听(from 鈧�48 billion to 鈧�30 billion) and the听United Kingdom听(from 鈧�111 billion to 鈧�97 billion) and an increase in the deficit vis-脿-vis听China听(from 鈧�80 billion to 鈧�93 billion). Moreover, the听goods听surplus vis-脿-vis the residual group of听other countries听increased strongly (from 鈧�7 billion to 鈧�82 billion), partly reflecting a decline in the deficit vis-脿-vis听Russia听(from 鈧�33 billion to 鈧�4 billion).
In听services听the deficit vis-脿-vis the听United States听increased (from 鈧�19 billion to 鈧�78 billion), while the deficit vis-脿-vis听offshore centres听declined (from 鈧�111 billion to 鈧�58 billion). The surplus vis-脿-vis the听United Kingdom听decreased (from 鈧�47 billion to 鈧�26 billion). In听primary income,听a lower deficit was recorded vis-脿-vis the听United States听(down from 鈧�43 billion to 鈧�7 billion), while the deficit vis-脿-vis听offshore centres听increased (from 鈧�50 billion to 鈧�66 billion). In听secondary income,听the deficit vis-脿-vis the听EU Member States and EU institutions outside the euro area听widened slightly from 鈧�91 billion to 鈧�96 billion.
International investment position
At the end of 2020 the international investment position of the euro area recorded net assets of 鈧�91 billion vis-脿-vis the rest of the world (0.8% of euro area GDP), compared with net assets of 鈧�61 billion in the previous quarter (see Chart听2 and Table听2).
This improvement of 鈧�30 billion reflected large but partly offsetting changes in the various investment components. Larger net assets were recorded for听portfolio debt听(鈧�885 billion, up from 鈧�435 billion), while net assets declined in听direct investment听(鈧�1,773 billion, down from 鈧�1,848 billion). Larger net liabilities were recorded for听other investment听(鈧�874 billion, up from 鈧�568 billion) and听portfolio equity听(鈧�2,486 billion, up from 鈧�2,467 billion).
The change in the euro area鈥檚 net international investment position in the fourth quarter of 2020 was driven by positive net flows due to transactions and price changes, which were partly offset by negative net exchange rate changes and other volume changes (see Chart 3).
Both the increase in net assets for听portfolio debt听and the increase in net liabilities for听other investment听were largely driven by transactions (see Table 2). Larger net liabilities for听portfolio equity听resulted from a combination of negative net price changes, exchange rate changes and other volume changes, which were partly offset by positive transactions. The听decrease in net assets for听direct investment听was due to negative net flows in transactions, other volume changes and exchange rate changes, which were partly offset by positive net price changes.
At the end of 2020 the听gross external debt听of the euro area amounted to 鈧�14.8 trillion (around 131% of euro area GDP), down by 鈧�281 billion compared with the previous quarter.
At the end of 2020 the stock of euro area听direct investment assets听was 鈧�11.1 trillion, 24% of which was invested in the听United States听and 20% in the听United Kingdom听(see Table 3). The stock of听foreign direct investment liabilities听was 鈧�9.3 trillion, with 28% being investments by the听United States,听21% by听offshore centres听and 18% by the听United Kingdom.
In听portfolio investment, euro area holdings of foreign securities amounted to 鈧�4.8 trillion in equity and to 鈧�5.9 trillion in debt at the end of 2020. The largest holdings of equity securities by the euro area were from the听United States听(accounting for 47%), followed by听offshore centres听and听the听United Kingdom听(11% and 10% respectively). For debt securities, the largest holdings by the euro area were from the听United States听(accounting for 34%), the听United Kingdom听(21%) and the听EU Member States and EU institutions outside the euro area听(14%). On the听portfolio investment听liabilities side, non-residents鈥� holdings of securities issued by euro area residents stood at 鈧�7.3 trillion in equity and at 鈧�5.0 trillion in debt at the end of 2020. The largest holder countries of euro area equity securities were the听United States听(43%) and the听United Kingdom听(9%), while for euro area debt securities the largest holders were the听BRIC听group of countries听(16%), the听United States听(14%) and听Japan听(12%).
In听other investment, euro area residents鈥� claims on non-residents amounted to 鈧�5.9 trillion, 33% of which was vis-脿-vis the听United Kingdom听and 20% vis-脿-vis the听United States. Euro area听other investment听liabilities amounted to 鈧�6.7 trillion, with the听United Kingdom听accounting for 32%, while the shares of the听EU Member States and EU institutions outside the euro area听and the听United States听were 19% and 16% respectively.
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