EU current account surplus €134.3 bn (2024)

FAQs

EU current account surplus €134.3 bn? ›

In the first quarter of 2024, the EU seasonally adjusted current account of the balance of payments recorded a surplus of €134.3 billion (+3.1% of GDP), compared with a surplus of €89.8 billion (+2.1% of GDP) in the fourth quarter of 2023 and a surplus of €55.2 billion (+1.3% of GDP) in the first quarter of 2023, ...

A current account surplus means that a country has more exports and incoming payments than imports and outgoing payments to other countries. It is generally deemed a positive because the current account surplus adds to a country's reserves.

The current account shows flows of goods, services, primary income and secondary income between residents and non-residents.

Current account. The current account of the EU, (EU vis-à-vis extra-EU), showed a surplus of €329.2 billion in 2023 (see Figure 1), corresponding to 1.9 % of gross domestic product (GDP). By comparison, in 2022 the current account exhibited a deficit of -€56.1 billion.

German leaders attribute their country's surplus primarily to the competitiveness of its manufacturing sector, domestic saving rates, and exogenous factors such as European monetary policy and the value of the euro, the currency that Germany shares with 18 other member states of the European Union.

The Relationship Between the Accounts

Consequently, when the balance of one account is in surplus (i.e. has a positive value, representing a credit), the balance of the other account must be in deficit (i.e. has a negative value, representing a debit).

External Commercial Borrowings (ECB) in India. External Commercial Borrowings are commercial loans widely used by eligible resident entities who raise ECBs from recognised non-resident entities.

Right to a basic bank account

If you are legally resident in an EU country you are entitled to open a "basic payment account". Banks cannot refuse your application for a basic payment account just because you don't live in the country where the bank is established.

A current account surplus is equivalent to foreign investment because surplus in current account means increment in national savings.

What is the EU account balance? ›

In the first quarter of 2024, the EU seasonally adjusted current account of the balance of payments recorded a surplus of €134.3 billion (+3.1% of GDP), compared with a surplus of €89.8 billion (+2.1% of GDP) in the fourth quarter of 2023 and a surplus of €55.2 billion (+1.3% of GDP) in the first quarter of 2023, ...

No interest or low interest: Traditionally, current accounts do not offer interest, and even if they do, the interest rates might not be as attractive as savings accounts. Minimum balance requirements: Some types of current accounts do have minimum balance requirements, failing which there could be penalties.

In simple words, Current Account Deficit (CAD) arises when the value of exports of goods and services is less than the value of imports of goods and services. Current Account surplus (CAS) is a situation that arises when the receipts on current account is more than the payments on current account.

Advanced economies, such as the United States (see chart), run current account deficits, whereas developing and emerging market economies often run surpluses or near surpluses.

Breakdown of the current account balances of G20 countries 2022 and 2027. China had the highest positive current account balance of the 19 countries that are members of the G20, reaching over 400 billion U.S. dollars in 2022.

How does a Current Account Surplus impact the national economy? A current account surplus embodies an economy is exporting more than it is importing, leading to an inflow of foreign currency. It strengthens the country's currency, reduces dependency on external borrowing, and stabilises the economy.

The truth is, current account deficits are not always bad, and nor are current account surpluses always good. The difference between a country's national income (Y) and private plus government consumption (C+G) is national savings (S) (i.e., private and government savings).

A current account surplus is generally a result of e. exports exceeding imports. Current account records the transaction related to imports and exports of the country. Imports are debited in the current account whereas exports are credited in the current account.

A country may have a large current account surplus because of relatively weak domestic demand. This weak demand leads to lower consumer spending and lower spending on imports. Therefore, in this case, domestic employment will suffer from a weak economy.

A surplus on the financial account means that there are more investment funds flowing into the country than flowing out. These inflows may be to fund a deficit on the current account of the balance of payments. Inward investment may help create jobs and boost growth, but anyone investing in an economy expects a return.