17 April 2019 For further information: [email protected]www.bancaditalia.it/statistics/index.html Figure 1 Current account: 12-month cumulated balances (billions of euros) 2013 2014 2015 2016 2017 2018 −60 −40 −20 0 20 40 60 80 100 −60 −40 −20 0 20 40 60 80 100 Goods Services Primary Income Secondary Income Current Account In the twelve months ending in February 2019 the current account surplus amounted to EUR 46.0 billion (2.6 per cent of GDP), from 45.0 billion in the corresponding period of 2018. The improvement was due to the balance of primary income (17.9 billion, from 9.4) and services (-2.8 billion, from -4.8), partly offset by the reduction of the goods surplus and to the increased deficit in secondary income (-17.4 billion, from -15.3). Figure 2 Net international investment position (percentage of GDP) 2013 2014 2015 2016 2017 2018 −30 −25 −20 −15 −10 −5 0 5 10 15 −30 −25 −20 −15 −10 −5 0 5 10 15 Flow in the quarter (financial account) Valuation adjustment in the quarter Net position at the end of the previous quarter Net position at the end of the quarter At the end of December 2018, Italy’s net international debtor position stood at EUR 69 billion (3.9 per cent of GDP). The slight increase (by around 17 billion) of the negative balance with respect to the previous quarter was mainly due to the fall in world stock prices, which led to negative valuation adjustments on equity and investment fund shares, especially on the asset side. Reference period: February 2019 '19
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17 April 2019 For further information: [email protected]/statistics/index.html
In the twelve months ending in February 2019 the current account surplus amounted to EUR 46.0 billion (2.6 per centof GDP), from 45.0 billion in the corresponding period of 2018. The improvement was due to the balance of primaryincome (17.9 billion, from 9.4) and services (-2.8 billion, from -4.8), partly offset by the reduction of the goods surplusand to the increased deficit in secondary income (-17.4 billion, from -15.3).
Figure 2Net international investment position
(percentage of GDP)
2013 2014 2015 2016 2017 2018−30
−25
−20
−15
−10
−5
0
5
10
15
−30
−25
−20
−15
−10
−5
0
5
10
15Flow in the quarter (financial account)Valuation adjustment in the quarter
Net position at the end of the previous quarterNet position at the end of the quarter
At the end of December 2018, Italy’s net international debtor position stood at EUR 69 billion (3.9 per cent of GDP).The slight increase (by around 17 billion) of the negative balance with respect to the previous quarter was mainly dueto the fall in world stock prices, which led to negative valuation adjustments on equity and investment fund shares,especially on the asset side.
Direct investmentPortfolio investmentFinancial derivatives
Other investmentReserve assetsTotal assets
In February 2019 foreign financial assets increased by 20.6 billion. Italian residents expanded direct investmentabroad by 3.7 billion, portfolio investment in foreign securities by 6.5 billion (mainly long-term debt instruments) and“other investment” by 10.4 billion.
Figure 4Financial account − liabilities
(monthly flows; billions of euros)
2015 2016 2017 2018−60
−40
−20
0
20
40
60
−60
−40
−20
0
20
40
60
Direct investmentPortfolio investment
Other investmentTotal liabilities
In February foreign liabilities also increased, by 22.1 billion. Foreign investors made direct investment in Italy by3.9 billion and “other investment“ by 24.4 billion, mostly due to the expansion of Italian banks net funding (includingthe transactions cleared through the resident central counterparty). These capital inflows were partly offset by theoutflows due to sales of Italian portfolio securities (6.3 billion, of which 4.9 billion pertaining to public debt instruments,almost exclusively BTP) .
Reference period: February 2019
'19
'19
General information
I Unless indicated otherwise, figures have been computed by the Bank of Italy.
II Symbols and Conventions:- the phenomenon does not occur;
.... the phenomenon occurs but its value is not known;
.. the value is known but is nil or less than half the final digit shown.
Figures in parentheses in roman type () are provisional. Those in parentheses initalics () are estimated.
III The tables are identified both by a number and by an alphanumeric code thatdefines the content of the table in the electronic database holding the informationto be released to the public. A similar code identifies the different aggregatesshown in each table.
General information
3
Balance of payments and international investment positionContents
C o n t e n t s
Tables available only on BDS
Seasonally adjusted current account TBP60090Services: balances TBP60125Services: credits TBP60124Services: debits TBP60123Transport: balances TBP60600Transport: credits TBP60610Transport: debits TBP60620Primary income: balances TBP60250Primary income: credits TBP60240Primary income: debits TBP60260Other primary income, secondary income and capital account: balances TBP60060Other primary income, secondary income and capital account: credits TBP60070Other primary income, secondary income and capital account: debits TBP60080Financial derivatives (net) TBP60280Other investment: assets TBP60180Other investment: liabilities TBP60270International investment position: ratio to gross domestic product TIIP0500International investment position: official reserve assets TRUF0450Exchange rates of the euro TBEXR230
A brief description of the methodology, the statistical sources and the main revisions concerning the series included in this report is available in Methodological note (20 December 2018 version).
For a more detailed description of the methodology and the main statistical sources used to produce statistics on the Italian balance of payments and international investment position, see Italy's balance of payments and international investment position manual (only in Italian).
(*) Tables for which more detail is available in BDS.
- Balance of payments: balances- Balance of payments: credits and debits- Current account: balances- Current account: credits- Current account: debits- International travel by purpose: credits, debits and balances- Financial account
- Portfolio investment (*)
- Changes in reserve assets- Changes in the TARGET2 balance in relation to the other Balance of payments items- International investment position: net positions (*)- International investment position: assets (*)- International investment position: liabilities (*)- Breakdown of external liabilities other than equity (external debt)- Price-competitiveness indicators based on producer prices in manufacturing TICOM250
Balance of payments and international investment position
Table A
Balance of payments(millions of euros)
(*) Assets refer to Italian capital and liabilities refer to foreign capital.(**) Derivatives’ flows are computed only as a balance, but by convention they are reported also on the asset side.Notes on the data: data updated until 16 April 2019.
Table A- Balance of payments
February 2019
Credits Debits Balance
(50,289) (47,036) (3,253)
(37,132) (32,924) (4,209)
(6,669) (7,795) (-1,125)
(5,388) (3,545) (1,842)
(1,100) (2,773) (-1,673)(124) (237) (-113)
Assets Liabilities Balance
(20,632) (22,075) (-1,444)
(3,695) (3,912) (-216)
(6,462) (-6,280) (12,742)
(20) - (20)
(10,408) (24,444) (-14,035)
(46) - (46)- - (-4,583)
Twelve months ending inFebruary 2019
Credits Debits Balance
(652,086) (606,046) (46,040)
(456,897) (408,529) (48,368)
(104,507) (107,333) (-2,826)
(73,861) (55,983) (17,878)
(16,821) (34,201) (-17,380)(4,020) (4,668) (-648)
Assets Liabilities Balance
(80,954) (50,368) (30,586)
(24,249) (22,525) (1,724)
(31,736) (-61,967) (93,704)
(-2,250) - (-2,250)
(24,483) (89,810) (-65,328)
(2,735) - (2,735)- - (-14,806)
February 2018
Credits Debits Balance
Current account............................. 48,288 46,006 2,282
Direct investment: intercompany lending ..... 139,744 141,440 144,933 143,952Debt liabilities of direct investment enterprises to direct investors ........................................... 38,321 39,974 43,152 44,393Debt liabilities of direct investors to direct investment enterprises .................................... 50,906 51,652 50,641 47,479Debt liabilities to fellow enterprises ................. 50,517 49,814 51,140 52,080
Total ................................................ 2,154,527 2,137,914 2,139,097 2,113,580
Table 9 - (TED60500) - Breakdown of external liabilities other than equity (external debt)
Balance of payments and international investment position
Methodological appendixNotes to the tables
The order of the tables in the following notes is based on their code numbers.
TBP60085- Financial accountItaly’s balance of payments data have been compiled since 2013 on the basis of the international standards laid
down by the IMF’s Balance of Payments and International Investment Position Manual (BPM6) and reconstructed forthe earlier periods to guarantee continuity. Starting from January 2009, investment portfolio data are derived, security-by-security, as the difference of the monthly stocks of foreign securities held by residents (assets) and bynonresidents (liabilities), in quantity or nominal value, evaluated at the average price of the security in the referenceperiod. The data sources used to calculate the stocks of foreign securities are the reports of resident custodians(mainly banks), anonymous and security-by-security, on securities held in custody on behalf of investorssupplemented by the reports of resident banks and money market funds and the Bank of Italy on their own securitiesand by a sample survey on assets held abroad by non-bank entities.
TBP60200 - Changes in the TARGET2 balance in relation to the other Balance of payments items The cross-border payments in euro of the euro-area national banking sectors and central banks (NCBs) are
settled through the common payments system TARGET2 (Trans-European Automated Real-time Gross settlementExpress Transfer system). When a bank makes a cross-border payment to another bank, this transaction is debitedto the account of the paying bank at its NCB and credited to the account of the receiving bank at its NCB. The NCBof the paying bank therefore records a decrease in the bank's account with it while the NCB of the recipient bankrecords an increase in the account of the recipient bank. These positions correspond to a liability in the TARGET2system for the first NCB and an asset for the second. Changes in TARGET2 assets and liabilities may also derivefrom cross-border transactions by the NCBs themselves, such as purchases and sales of securities. At the end of thebusiness day, assets and liabilities are aggregated and offset at the Eurosystem level. This process gives rise, foreach NCB, to a bilateral net position vis-à-vis the ECB in the form of a positive or negative TARGET2 balance. Thebalance is recorded in the external statistics among other investments in the item ‘accounts and deposits’ of thecentral bank, either on the asset side (when the balance is positive) or on the liability side (when the balance isnegative). The TARGET2 balance of each country can be seen as a contra item to the commercial and financialtransactions between residents and non-residents and its changes over time can, therefore, be described ex-postusing the balance of payments accounting identity. The table provides a breakdown of the changes in the TARGET2balance by showing its main counterparts for Italy:
A. foreign portfolio investment in Italian public debt securities;
B. foreign portfolio investment in Italian private sector securities, excluding bank bonds;
C. foreign portfolio investment in Italian bank bonds;
D. resident monetary financial institutions’ (excluding the central bank) net foreign funding for loans, deposits andother investments (including transactions cleared through the resident central counterparty);
E. current account balance and capital account balance;
F. net liquidity inflows due to other items (direct investments from and into the country, residual items in the ‘otherinvestments’ item, changes in official reserves, financial derivatives, other portfolio liabilities, errors andomissions); and
G. portfolio investment in foreign financial assets by Italian residents.
By definition, the change in the TARGET2 balance is equal to A + B + C + D + E + F - G: liquidity inflows (outflows)
22
Balance of payments and international investment position
determine an improvement (worsening) of the TARGET2 balance over the reference period.
The sum of items A, B and C corresponds to the total purchases of Italian portfolio securities by non-residents(excluding central bank portfolio liabilities and the equity securities of the public sector, which are included in theresidual items ‘F’ and are typically zero); positive values represent liquidity inflows.
Item D is the difference between the increase in liabilities and that in assets for other investments by residentmonetary financial institutions (excluding the central bank); positive values represent liquidity inflows. The liabilitiesin item D also include repo transactions by the banking sector that are cleared through the resident centralcounterparty (which in the balance of payments presentation is classified under ‘other sectors’, as it is not a bank).
Positive current and capital account balances indicate liquidity inflows, as well as a positive value for the residualitems F. Purchases of foreign portfolio securities by residents (item G) instead indicate liquidity outflows.
From an accounting point of view, changes in the TARGET2 balance are recorded as an increase/decrease inassets when the balance is positive, and in liabilities when the balance is negative. In the latter case, which is thesituation of the TARGET2 balance of the Bank of Italy since July 2011, an improvement in the balance is recordedwith a negative sign, i.e. as a reduction in liabilities. Therefore, the sign of the change in the TARGET2 balanceobtained from the sum A + B + C + D + E + F - G is the opposite of that in the standard presentation of the balanceof payments.
TBP60300 - Current account: balances The data have been compiled since 2013 on the basis of the international standards laid down by the IMF’s
Balance of Payments and International Investment Position Manual (BPM6) and reconstructed for the earlier periodsto guarantee continuity.
TBP60310 - Current account: credits The data have been compiled since 2013 on the basis of the international standards laid down by the IMF’s
Balance of Payments and International Investment Position Manual (BPM6) and reconstructed for the earlier periodsto guarantee continuity.
TBP60320 - Current account: debits The data have been compiled since 2013 on the basis of the international standards laid down by the IMF’s
Balance of Payments and International Investment Position Manual (BPM6) and reconstructed for the earlier periodsto guarantee continuity.
TBP60400 - International travel by purpose: credits, debits and balances Data are derived from the sample survey on Italy's international tourism, carried out by the Banca d'Italia on a
continuous basis since 1996. The survey consists in questioning a sample of inbound and outbound travellers at theborders. Two main activities are carried out each year: around 150,000 face-to-face interviews in order to collectinformation on the travellers' expenditure and on a set of detailed traveller's characteristics and behaviour, and about1,500,000 counting operations for disaggregating the number of travellers - drawn by administrative sources - bycountry of residence.
TED60500 - Breakdown of external liabilities other than equity (external debt) The data are compiled on the basis of the sixth IMF’s Balance of Payments and International Investment Position
Manual (BPM6) and therefore are consistent with those related to international investment position. External debtstatistics are a subset of the international investment position statistics, as the former do not include financial
23
Balance of payments and international investment position
derivatives, equity capital and reinvested earnings. Partial misalignments between the two sets of statistics may be due to the differences in the provisional nature of the data. With effect from end-2008 data, portfolio investment stocks are calculated on the basis of an anonymous security-by-security reporting of the stocks held for investors by depositories.
TICOM250 - Price-competitiveness indicators based on producer prices in manufacturing The table gives overall price-competitiveness indicators (export and import competitiveness combined)
as calculated on the basis of manufacturing producer prices in 61 countries. Starting in December 2018, the set of indicators presented in the table comprises 12 countries, as Brazil, Poland and Turkey are now excluded from the group of countries for which indicators are provided; at the same time, the dissemination of new time series has begun which provide a breakdown of the indicators based on a number of attributes (outlet market; subset of competitors; distinction between import and export competitiveness). The new series are published in Excel format. All the published time series are monthly and begin in January 1992. For the method of calculation see A. Felettigh and C. Giordano, Rethinking prices and markets underlying price-competitiveness indicators, Banca d’Italia, Questioni di Economia e Finanza (Occasional Papers), 447, July 2018. Rounding may cause discrepancies between monthly, quarterly and annual data.
TIIP0200 - International investment position: net positions The data have been compiled since 2013 on the basis of the international standards laid down by the IMF’s
Balance of Payments and International Investment Position Manual (BPM6) and reconstructed for the earlier periods to guarantee continuity. Further information is included in the notes to Tables TIIP0300 e TIIP0400.
TIIP0300 - International investment position: assets The data have been compiled since 2013 on the basis of the international standards laid down by the IMF’s
Balance of Payments and International Investment Position Manual (BPM6) and reconstructed for the earlier periods to guarantee continuity. With effect from end-2007, Italy's international investment position is compiled on the basis of a statistical data collection and compilation system based on stock data; the series prior to end-2007 have been revised to provide continuity with the new data. With effect from end-2008 data, portfolio investment stocks are calculated on the basis of an anonymous security-by-security reporting of the stocks held for investors by depositories (as provided for in Guidelines ECB/2004/15 and ECB/2007/3).
TIIP0400 - International investment position: liabilities The data have been compiled since 2013 on the basis of the international standards laid down by the IMF’s
Balance of Payments and International Investment Position Manual (BPM6) and reconstructed for the earlier periods to guarantee continuity. With effect from end-2007, Italy's international investment position is compiled on the basis of a statistical data collection and compilation system based on stock data; the series prior to end-2007 have been revised to provide continuity with the new data. With effect from end-2008 data, portfolio investment stocks are calculated on the basis of an anonymous security-by-security reporting of the stocks held for investors by depositories (as provided for in Guidelines ECB/2004/15 and ECB/2007/3). Starting with the November 2013 issue of the Supplement, the external debtor position in financial derivatives of General government of Italy includes new information on transactions with foreign banks. The information became available following a cooperation agreement with the Ministry of Economy and Finance, under which new estimation methods consistent with national accounts and balance of payments definitions were developed. Since the variation in the liability side is entirely due to valuation adjustments, no corrections were made to balance of payments flows.
‘Statistics’ series publications are available on the Bank of Italy’s site: http://www.bancaditalia.it/statistiche/ Requests for clarifications concerning data contained in this publication can be sent by e-mail [email protected]
Publication not subject to registration pursuant to Article 3 bis of Law 103/2012