The weak manufacturing and gross domestic product (GDP) data of Germany, Europe' largest economy, bring Euro close to its lowest since April 2017 at US$1.0836 in Asian market - Photo: Special

JAKARTA (TheInsiderStories) – Eurostat reported euro-area inflation slowed to 1 percent in July from last year and down from June at 1.3 percent. While, European Central Bank (ECB) reported the current account of the euro area recorded a surplus of 18 billion Euros, compared with a surplus of 30 billion Euros in May 2019.

The lowest annual rates were registered in Portugal (-0.7 percent), Cyprus (0.1 percent) and Italy (0.3 percent). The highest annual rates were recorded in Romania (4.1 percent), Hungary (3.3 percent), Latvia and Slovakia (both 3.0 percent).

Compared with June, annual inflation fell in fifteen member states, remained stable in two and rose in eleven. In July, the highest contribution to the annual euro area inflation rate came from services (+0.53 percentage points, pp), followed by food, alcohol & tobacco (+0.37 pp), non-energy industrial goods (+0.08 pp) and energy (+0.05 pp).

ECB reported in the 12-month (YoY) period to June 2019, the current account recorded a surplus of 318 billion Euros (2.7 percent of euro area GDP), down from 391 billion Euros (3.4 percent of euro area GDP).

In the financial account, euro area residents made net acquisitions of foreign portfolio investment securities totaling 58 billion Euros YoY (decreasing from 484 billion Euros in June 2018). Non-residents’ net purchases of euro area portfolio investment securities amounted to 42 billion Euros, down from 249 billion Euros YoY.


ECB also reported the current account of the euro area recorded a surplus of 18 billion Euros in June 2019, a decrease of 12 billion Euros from the previous month. Surpluses were recorded for goods (25 billion Euros),primary income (4 billion Euros) and services (3 billion Euros). These were partly offset by a deficit for secondary income (14 billion Euros).

In the same period, the current account recorded a surplus of 318 billion Euros (2.7 percent of euro area GDP), compared with a surplus of 391 billion Euros (3.4 percent of euro area GDP) in June 2018.

This decline was driven by smaller surpluses for goods (down from 318 billion Euros to 290 billion Euros), services (down from 117 billion Euros to 96 billion Euros) and primary income (down from 94 billion Euros to 91 billion Euros), as well as by a larger deficit for secondary income (up from 138 billion Euros to 159 billion Euros).

In direct investment, euro area residents made net disinvestments of 316 billion Euros in non-euro area assets in the 12-month period to June 2019, compared with net investments of 85 billion Euros in June 2018. Non-residents also made net disinvestments in the euro area, of 246 billion Euros, compared with net disinvestments of 98 billion Euros in June 2018.

In portfolio investment, net acquisitions of foreign debt securities by euro area residents decreased to 91 billion Euros in June 2019, from 319 billion Euros in June 2018. Over the same period, euro area residents switched from net purchases of foreign equity 166 billion Euros to net sales of 33 billion Euros.

Non-residents’ net purchases of euro area equity fell to 62 billion Euros in June 2019, down from 354 billion Euros in the 12-month period to June 2018. At the same time, their net sales of euro area debt securities decreased from 105 billion Euros to 19 billion Euros.

In other investment, euro area residents’ net acquisitions of foreign assets increased to 318 billion Euros in June 2019, up from 229 billion Euros in June 2018. Furthermore, their net incurrence of liabilities decreased to 81 billion Euros from 335 billion Euros.

The monetary presentation of the balance of payments shows that the net external assets of euro area increased by 295 billion Euros in June 2019. This increase was driven mainly by the euro area’ current and capital accountsurplus and to a lesser extent, by non‑MFIs’ net inflows in portfolio investment equity and direct investment. This was partly offset by euro area non-MFIs’ net outflows in portfolio investment debt securities.

In June 2019 the Eurosystem’ stock of reserve assets increased to 770.8 billion Euros, up from 751.2 billion Euros in the previous month. This increase of 19.6 billion Euros was driven by positive price changes of monetary gold, which were only partly offset by net sales of assets and negative exchange rate changes.

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