EUROZONE DATA: Dec Current Account Surplus At 2.8% From 1.7% A Year Ago

The Eurozone seasonally adjusted current account surplus was E38.4bln in December, up from a downwardly revised E25.1bln in November (vs E27.0bln initial). As a 12m rolling percentage of GDP, the surplus was steady at 2.8%. That’s still up from 1.7% in 2023.

• The increase in the surplus from a year ago was largely goods driven (2.6% of GDP in Dec  2024 vs 1.7% the year prior), with the services surplus seeing a more modest increase to 1.1% (vs 0.8% a year prior).
• Primary (0.2% of GDP) and secondary (-1.1% of GDP) income balances were unchanged on the year.
• In the financial account, net direct investment outflows increased to 1.2% of GDP from 0.2% over the year, offset a little by increased portfolio investment inflows (1.0% from 0.6% a year ago).
• Equity portfolio investment inflows will be closely watched in the January and February data, given the strong rally in European markets year-to-date (Estoxx 50 up over 13% YTD).
• Smaller movements were seen in financial derivatives, other investments and reserve assets.
• The broad balance (CA + net direct investment inflows + net portfolio investment inflows) thus increased to 2.6% from 2.0% in December 2023, a little below November’s 3.1% reading.