Balance of payment statistics

Data extracted in April 2018.

Planned article update: May 2019.

The EU current account surplus was EUR 222 billion in 2017 corresponding to 1.4 % of GDP.
The EU current account surplus was EUR 170 billion with the United States and deficit EUR 113 billion with China in 2017.
Around two thirds of EU Member States' international trade in goods and services was with other Member States in 2017.

Current account balance, 2017

The balance of payments records all economic transactions between resident and non-resident entities during a given period. This article presents data on the current and financial accounts of the balance of payments for the European Union (EU) and its Member States. Data are presented in regard to the new compilation standard of the IMF’s sixth balance of payments manual (BPM6).

The balance of the current and capital accounts determines the exposure of an economy to the rest of the world, whereas the financial account explains how it is financed. Ideally, the balance of the current and capital accounts should equal the total net of the financial account, otherwise net errors and omissions were recorded. Articles on foreign direct investment (in chapter 4) provide more information on one component of the financial account, while an article on international trade in services focuses on one component of the current account.

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Current account

The current account of the EU-28 showed a surplus of EUR 221.9 billion in 2017 (see Figure 1), corresponding to 1.4 % of gross domestic product (GDP). By comparison, in 2016 the current account surplus was EUR 231.4 billion. The latest developments for the EU-28’s current account show a continuation of the pattern established since 2008: while the current account deficit peaked in 2008 at 2.3 % of GDP, it gradually diminished, and in 2012 turned into a surplus equivalent to 0.5 % of GDP; the surplus was equivalent to 1.1 % of GDP in 2015 and 1.6 % in 2016. The current account surplus of the EU-28 for 2017 was based on firm surpluses in the component accounts for goods (0.9 % of GDP) and services (1.2 % of GDP), while primary income (-0.0 % of GDP), secondary income (-0.6 % of GDP) and the capital account (-0.3 % of GDP) balanced slightly negatively — see Figure 3.

Figure 1: Current account transactions, EU-28, 2007-17
(EUR billion)
Source: Eurostat (bop_eu6_q)

Among the partner countries and regions shown in Figure 2, the EU-28’s current account deficit was largest with China, standing at EUR 112.9 billion in 2017, followed by Russia (EUR 27.5 billion) and Japan (EUR 11.5 billion). On the other hand, the highest current account surpluses were recorded with the United States (EUR 170.0 billion) and Switzerland (EUR 68.8 billion). Smaller surpluses were recorded with Brazil, Canada and Hong Kong, while a smaller deficit was recorded with India.

Figure 2: Current account balance with selected partners, EU-28, 2017
(EUR billion)
Source: Eurostat (bop_eu6_q)

There were eight EU Member States that reported current account deficits in 2017, and 20 that recorded surpluses (see Figure 3 and Table 1). The largest deficits (relative to GDP) were observed in Cyprus (6.7 %) and the United Kingdom (4.1 %), while Malta and Ireland reported the largest surpluses relative to GDP in their current accounts (12.6 % and 12.5 %), followed by the Netherlands (10.2 %) and Germany (8.0 %). In absolute terms Germany recorded by far the largest current account surplus (EUR 262.7 billion) and the United Kingdom the largest current account deficit (EUR 94.6 billion).

Figure 3: Main components of the current account balance, 2017
(% of GDP)
Source: Eurostat (bop_eu6_q), (bop_c6_q) and (nama_10_gdp)

When regarding the components in detail the EU-28's current account surplus with the rest of the world is firmly built upon positive balances in the goods and services accounts (EUR 142.4 billion and EUR 181.4 billion) — see Table 1. In absolute terms Germany (EUR 265.6 billion), Ireland (EUR 107.3 billion), the Netherlands (EUR 90.2 billion) and Italy (EUR 55.7 billion) were the most prominent net exporters in goods to other countries, while more than half of the EU Member States (15 countries) faced negative balances in their goods accounts in 2017. Among those is the United Kingdom the major net importer of goods (EUR 154.6 billion). However, the same major net exporting economies in goods appear respectively as net importers in services in 2017, and vice versa: while Germany (EUR -16.1 billion), Ireland (EUR -12.2 billion), the Netherlands (EUR -5.4 billion), and Italy (EUR -3.9 billion) observed negative balances in their services accounts, the United Kingdom was the major net exporter of services (EUR 122.0 billion) to the rest of the world.

Among EFTA countries, Norway and Switzerland reported current account surpluses in 2017 (Switzerland EUR 58.9 billion, Norway EUR 18.1 billion). This was supported by surpluses for goods in both countries (Switzerland EUR 43.3 billion, Norway EUR 17.7 billion), a firm influx of primary income flows (Norway EUR 16.9 billion, Switzerland EUR 8.4 billion) and a surplus for services in Switzerland (EUR 17.0 billion).

Table 1: Main components of the current account balance and the capital account balance, 2017
(EUR billion)
Source: Eurostat (bop_eu6_q) and (bop_c6_q)

Altogether 13 Member States recorded surpluses for goods in 2017, while 23 Member States recorded surpluses for services with the rest of the world — see Figure 3. Among those with the largest relative exposure to surpluses in goods were Ireland (36.2 % of GDP), the Netherlands (12.3 % of GDP) and Germany (8.1 % of GDP). Highest relative exposure to surpluses in services were measured for Luxembourg (41.9 % of GDP), Malta (32.4 %) and Cyprus (21.6 %). The net importing economies with largest relative exposure in goods were Cyprus (23.5 % of GDP), Croatia (16.7 % of GDP) and Malta (14.8 % of GDP), and in services Ireland (4.1 % of GDP) in 2017.

On average around two thirds of the EU-28 Member States' trade in goods and services in 2017 related to trade with other EU partners — see Figure 4. Cross-border trade in goods with EU partners was highest in Luxembourg (83.9 %) and lowest in Ireland (46.2 %). Cross-border trade in services with the EU partners was most prominent in Slovakia (82.1 %) and lowest in Ireland (40.9 %). Among EFTA countries Norway showed a high degree of connectedness of its trade in goods and services to the EU (70.2 % in goods, 68.4 % in services), figures for Switzerland were not available for publication.

Figure 4: Intra-EU exposure of trade in goods and services, 2017
(% of rest of the world)
Source: Eurostat (bop_eu6_q) and (bop_c6_q)

Capital account

Traditionally the capital account of the EU-28 records a deficit, with considerable capital transfers to the rest of the world. In 2017, this trend was continued with a capital account deficit of EUR 38.8 billion, equivalent to 0.3 % of GDP — see Table 1. This was mainly built upon the large capital account deficit in Ireland (EUR 26.9 billion).

Financial account

Three types of investment (direct investment or FDI, portfolio and other investment) consolidate the financial account along with (net) financial derivatives and reserve assets. Assets and liabilities are interpreted as net values (net acquisition of assets, net incurrence of liabilities). Accordingly, the net financial account is interpreted as net lending to the rest of the world when positive, and net borrowing from the rest of the world when negative.

A total of 19 EU Member States were net lenders to the rest of the world in 2017, showing surpluses in their net financial accounts, with the highest value relative to GDP reported by Malta (11.3 % of GDP). Eight EU Member States appeared to be net borrowers, among those most prominently Slovakia (-4.5 % of GDP). Note that one Member State decided not to publish its net exposure in the financial accounts (United Kingdom) — see Figure 5.

Figure 5: Financial account balance, 2017
(% of GDP)
Source: Eurostat (bop_eu6_q)

In absolute terms, the largest net lender, by far, in the EU-28 was Germany, with net lending of EUR 275.7 billion in 2017 (see Table 2). This contributed considerably to the EU-28 and the euro area's status as net lender to the rest of the world with EUR 406.6 billion (EU-28) and EUR 429.1 billion (euro area) of net lending, equivalent to 2.7 % of EU-28 GDP and 3.8 % of euro area GDP. The euro area financial surplus was sustained by net acquisitions of foreign assets during 2017 in direct, portfolio and other investment (EUR 135.5 billion, EUR 638.2 billion and EUR 265.5 billion) which were significantly higher than the corresponding net incurrences of liabilities in these components. The latest data also confirm that the major hubs for financial account transactions in the EU-28 in 2017 were Germany, Luxembourg, the Netherlands, Ireland and the United Kingdom.

Table 2: Main components of the financial account balance with the rest of the world, 2017
(EUR billion)
Source: Eurostat (bop_eu6_q) and (bop_c6_q)

Germany, as the largest net lender in the EU-28, showed high levels of net acquisitions in direct, portfolio and other investment assets, and dynamically increased its asset positions with the rest of the world during 2017, while reducing its outstanding portfolio investment liabilities (net redemption of EUR 95.0 billion). On the other hand, the United Kingdom increased its net acquisitions in all major components of the financial account (in particular net acquisitions in other investment assets of EUR 187.3 billion, net incurrence in other investment liabilities of EUR 283.5 billion).

Luxembourg recorded high levels of both lending and borrowing activities in direct, portfolio and other investment with a structural shift from direct investment to the other financial account components, resulting in relatively high exposures of transactions in relation to its GDP. While net acquisitions of assets/net incurrences of liabilities in direct investment with the rest of the world significantly fell in 2017 (EUR -231.9 billion in assets and EUR -233.8 billion in liabilities), net transactions in portfolio investment culminated to EUR 317.4 billion in assets (573.1 % of GDP) and EUR 336.7 billion in liabilities (608.1 % of GDP). These high levels of activity in portfolio investment is sustained by the domestic mutual fund industry with considerable spill-overs in asset portfolio transactions. Direct investment activities in the Netherlands saw on the other hand a considerable net expansion. Net acquisitions in direct investment assets with the rest of the world increased by EUR 264.4 billion and net incurrence of direct investment liabilities by EUR 281.7 billion during 2017.

Transaction levels in other investment were considerably boosted in the EU-28 during 2017, with the United Kingdom most prominently playing a leading role. Net acquisitions of other investment assets by the UK increased to EUR 187.3 billion and net incurrence of other investment liabilities to EUR 283.5 billion in 2017.

As concerns transactions in financial derivatives and employee stock options, the EU-28 was also a net lender in 2017 (EUR 30.4 billion), although this only amounted to 0.2 % of its GDP. Most prominently Ireland, the United Kingdom and Germany recorded highest surpluses, with significant exposure in Ireland relative to its GDP (14.5 %). On the contrary, Luxembourg was the most prominent net borrower with its net deficit of EUR 16.8 billion.

Among EFTA countries, unsurprisingly Switzerland showed the most significant exposure to financial transactions. Switzerland and Norway were net lenders in 2017 (Switzerland EUR 36.3 billion, Norway EUR 16.4 billion), with Switzerland recording net acquisitions in other investment assets of EUR 15.8 billion and net incurrence in direct investment liabilities of EUR 36.6 billion. Norway's net lending status in its financial account was firmly supported by increases in net acquisition of portfolio investment assets by EUR 16.6 billion. On the other hand, Iceland reported only a slightly positive balance in its financial account with the rest of the world by EUR 0.6 billion in 2017, seeing considerable reduction in net transactions of direct investment assets and liabilities.

Source data for tables and graphs

Data sources

The main methodological reference used for the production of balance of payment statistics is the sixth balance of payments manual (BPM6) of the International Monetary Fund (IMF). This new set of international standards has been developed, partly in response to important economic developments, including an increased role for globalisation, rising innovation and complexity in financial markets, and a greater emphasis on using the balance sheet as a tool for understanding economic activity (asset–liability principle).

The transmission of balance of payments data to Eurostat is covered by Regulation 184/2005 on Community statistics concerning balance of payments, international trade in services and foreign direct investment. New data requirements according to the BPM6 manual are included in Commission Regulation no 555/2012 of 22 June 2012 and Commission Regulation no 1013/2016 of 8 June 2016 as an amendment to the above.

In April 2018, the first provisional data for the 4th quarter of 2017 became available, from which the first estimate of the annual results for 2017 have been produced.

Current account

The current account of the balance of payments provides information not only on international trade in goods (traditionally the largest category), but also on international transactions in services, primary and secondary income. For all these transactions, the balance of payments registers the value of credits (exports) and debits (imports). A positive balance — a current account surplus (which applies to the EU-28 since 2012) — shows that an economy is earning more from its international export transactions than spending abroad from import transactions with other economies, and is therefore a net creditor (net exporter) towards the rest of the world.

The current account gauges a country’s economic situation in the world, covering all transactions that occur between resident and non-resident entities. More specifically, the four main components of the current account are defined, according to the BPM6, as follows.

  • International trade in goods covers general merchandise, net exports of goods under merchanting and non-monetary gold. Exports and imports of goods are recorded on a so-called free-on-board (FOB) valuation — in other words, at market value at the customs frontiers of exporting economies, thus including charges for insurance and transport services up to the frontier of the exporting economy. As a consequence for imports an FOB adjustment is required in order to deduct the value of freight and insurance premiums incurred for the transport up to the border of the importing economy.
  • International trade in services consists of the following items: manufacturing services performed on physical inputs owned by others (goods for processing), maintenance and repair services, transport services performed by EU residents for non-EU residents, or vice versa, involving the carriage of passengers, the movement of goods, and auxiliary services, such as cargo handling charges, packing and repackaging, towing not included in freight services, pilotage and navigational aid for carriers, air traffic control, salvage operations, agents’ fees, and so on; travel, which includes primarily the goods and services EU travellers acquire from non-EU residents, or vice versa; and other services, which include construction services, insurance and pension services, financial services, charges for the use of intellectual property not included elsewhere, telecommunications, computer and information services, other business services (which comprise research and development services, professional and management consulting services, technical and other trade-related services, personal, cultural and recreational services, and government services not included elsewhere).
  • Primary income covers basically three types of transactions: compensation of employees paid to non-resident workers or received from non-resident employers, investment income from direct, portfolio, other investment and reserve assets, and other primary income (taxes on production and on imports, subsidies and rent). All investment income components cover income on equity and investment fund shares (divided between distributed and accrued income) and interest from investment in debt securities, deposits or loans, and investment withdrawals from income of quasi-corporations.
  • Secondary income includes general government current transfers, for example payments of current taxes on income and wealth, social contributions and benefits, transfers related to international cooperation, and current transfers related to financial and non-financial corporations, households, or non-profit organisations.

Capital account

The capital account of the balance of payments provides information on the acquisition of non-financial assets by residents in the rest of the world, or by non-residents in the compiling economy, for example investment in real estate. It also includes capital transfers by general government and financial, non-financial corporations, households or non-profit organisations (also specifically covering debt forgiveness).

Financial account

The financial account of the balance of payments covers all transactions associated with changes of ownership in financial assets and liabilities of an economy with the rest of the world. The financial account is broken down, according to the BPM6, into five main components: direct investment, portfolio investment, financial derivatives, other investment, and reserve assets. All components are now recorded according to the asset–liability principle, which supports the full implementation of the balance sheet approach in the financial account. In this regard, net values are recorded and have to be interpreted by keeping the underlying gross transactions in mind — net acquisition of assets is based on the acquisition of new assets minus the sale of assets during the observed period, while net incurrence of liabilities consists of the issue of new liabilities minus redemptions of outstanding liabilities. The resulting balance of net assets minus net liabilities is interpreted as net lending to the rest of the world when positive, or net borrowing when negative.

Direct investment implies that a resident direct investor makes an investment that gives control or a significant degree of influence on the management of an enterprise in another economy. Within this classification FDI in equity/investment fund shares (plus reinvestment of earnings where applicable) and in debt securities are distinguished. A breakdown is required for transactions by direct investor in direct investment enterprises, reverse investments and international transactions between fellow enterprises with the ultimate controlling parent being either resident or non-resident. More aspects are covered in dedicated articles on foreign direct investment (in chapter 4).

Portfolio investment records the transactions in negotiable financial securities with the exception of the transactions which fall within the definition of direct investment or reserve assets. Two main components are identified: equity securities and debt securities (bonds and notes or money market instruments).

Financial derivatives (other than reserves) are financial instruments that are linked to another specific financial instrument, indicator or commodity, and through which specific financial risks can be traded in financial markets in their own right. Transactions in financial derivatives are treated as separate transactions, rather than integral parts of the value of underlying transactions to which they may be linked. They are disseminated as net value of assets and liabilities only.

Other investment is a residual category, which is not recorded under the other headings of the financial account (direct investment, portfolio investment, financial derivatives or reserve assets) and in principal covers four types of instruments — currency and deposits (in general, the most significant item), trade credits/advances, loans, and other assets and liabilities.

Reserve assets are foreign financial assets available to and controlled by monetary authorities; they are used for financing and regulating payments imbalances or for other purposes.


The EU is a major player in the global economy for international trade in goods and services, as well as foreign investment. Balance of payments statistics give a complete picture of all external transactions for the EU and its individual Member States. Indeed, these statistics may be used as a tool to study the international exposure of different parts of the EU’s economy, indicating its comparative advantages and disadvantages with the rest of the world, and to calibrate the implied macroeconomic risks for the economy. The financial and economic crisis 2007-2008 underlined the importance of developing such economic statistics insofar as improvements in the availability of data on the real and financial economies of the world could have helped policymakers and analysts when the crisis unfolded; for example, if internationally comparable information about financial transactions and exposure in specific assets and liabilities had been available earlier.

The European Commission launched new policy proposals in this domain aiming to stimulate the economic recovery (such as the European Fund for Strategic Investments), and to launch regular initiatives to calibrate macroeconomic risks in the EU Member States (such as the Macroeconomic imbalance procedure). Further details on the European Commission’s initiatives are available from the website of the European Commission’s Directorate-General for Economic and Financial Affairs, where more detailed information may be found on a range of recent priorities, for example Growth and Investment and the The European semester.

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Balance of payments - international transactions (BPM6) (bop_6)