ECB reports lower euro area current account surplus in Q3 2025
The euro area current account recorded a surplus of €283 billion (1.8 percent of euro area GDP) in the four quarters to Q3 2025, down from €425 billion (2.8 percent of GDP) a year earlier. The decline was primarily driven by a shift to a deficit in primary income.
Primary income shifts to deficit
The euro area's current account surplus decreased significantly, primarily due to a substantial shift in primary income, which moved from a surplus of €55 billion to a deficit of €41 billion.
This reversal was largely driven by sharply reduced surpluses in direct investment income, falling from €104 billion to €17 billion, and a larger deficit in equity and investment fund income, increasing from €190 billion to €205 billion.
Additionally, the secondary income deficit widened from €161 billion to €188 billion, and the services surplus decreased from €168 billion to €144 billion.
The decline in services was mainly attributed to increased deficits in other business services (€78 billion from €45 billion) and intellectual property charges (€136 billion from €109 billion), partially offset by a higher surplus in telecommunications, computer, and information services (€230 billion from €202 billion).
These negative trends were partly mitigated by an increased surplus in goods trade, which rose from €362 billion to €368 billion, mainly reflecting a higher surplus in chemical products (€310 billion from €268 billion) and a reduced deficit in energy products (€242 billion from €266 billion).
Net claims rise, China deficit widens
The euro area's international investment position (IIP) showed net claims of €1.72 trillion (11.0 percent of euro area GDP) at the end of Q3 2025, up from €1.51 trillion in the previous quarter.
This €209 billion increase in net claims was primarily driven by a rise in currency reserves (€1.62 trillion from €1.46 trillion) and net claims in debt securities (€1.52 trillion from €1.41 trillion), partially offset by decreased net claims in direct investments (€2.72 trillion from €2.75 trillion).
The IIP's evolution was mainly due to positive price changes (€282 billion) and transaction-related changes (€35 billion), partially offset by other adjustments and exchange rate effects.
Geographically, the euro area recorded its highest bilateral current account surplus with the United Kingdom (€206 billion) and its largest deficit with China (€144 billion), which widened from €85 billion a year earlier.
The deficit with the United States also increased significantly, moving from a surplus of €9 billion to a deficit of €32 billion.
A mixed picture for external balances
The latest balance of payments data presents a nuanced view of the euro area's external position.
While the overall current account surplus has declined, the underlying shifts in primary income and services suggest structural challenges that warrant closer monitoring.
The widening deficit with China and the turnaround with the United States highlight evolving trade dynamics that could impact future growth prospects, despite the overall resilience indicated by rising net claims in the International Investment Position.