The decrease in euro area net financial outflows in 2018: foreign direct investment retrenchment and portfolio investment slowdown

Michael Fidora and Martin Schmitz

Economic Bulletin Boxes, 2019, vol. 4

Abstract: This box analyses recent developments in the financial account of the euro area balance of payments. In 2018, the euro area recorded net financial outflows of 2.7% of GDP amid an overall decline in gross cross-border financial flows. Portfolio investment, particularly in debt securities, continued to be affected by the Eurosystem’s asset purchase programme. At the same time, the euro area recorded a retrenchment in foreign direct investment flows, mainly reflecting transactions vis-à-vis the United States, most likely linked to the US tax reform. JEL Classification: F21, F32

Keywords: Balance of payments; financial account; foreign direct investment; portfolio investment (search for similar items in EconPapers)
Date: 2019-06
Note: 491968
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