Euro Area Balance of Payments Reports €32 Billion Surplus in May 2025

The European Central Bank (ECB) announced that the euro area recorded a substantial current account surplus of €32 billion in May 2025, reflecting a significant increase from the previous month’s surplus of €19 billion. This report, released on July 18, 2025, underscores the euro area's economic resilience amidst fluctuating global markets.

The current account surplus for the twelve months leading up to May 2025 totaled €333 billion, which constituted approximately 2.1% of the euro area GDP, a decrease from the €364 billion surplus or 2.5% of GDP recorded in the same period one year earlier. The report detailed that the surplus was driven primarily by the goods sector, which alone contributed €33 billion. Meanwhile, the services sector provided an additional €13 billion, while primary income accounted for €2 billion. However, these gains were partially offset by a secondary income deficit of €16 billion.

According to the ECB, the fluctuations in the current account balance stemmed from several factors, including a notable shift from a surplus to a deficit in primary income, which transitioned from €34 billion surplus to a €5 billion deficit, alongside an increase in the secondary income deficit from €169 billion to €185 billion. Furthermore, while the surplus for services declined from €153 billion to €146 billion, the goods surplus saw an increase from €346 billion to €378 billion.

In the financial account, euro area residents made net acquisitions of non-euro area portfolio investment securities totaling €758 billion, while non-residents acquired €744 billion in euro area portfolio investments over the 12 months leading up to May 2025. The ECB’s report highlighted that euro area residents recorded net investments of €200 billion in non-euro area assets, a notable recovery from net disinvestments of €215 billion in the previous year.

The ECB's analysis indicates that euro area financial institutions' net external assets increased by €417 billion over the same period, driven by the current account surplus and capital inflows from portfolio investments. The monetary presentation of the balance of payments reflected an increase in the Eurosystem's stock of reserve assets, which rose from €1,496.9 billion to €1,507.7 billion, primarily due to positive price changes and net acquisitions of assets.

As the ECB prepares for its next release on August 19, 2025, analysts stress the importance of closely monitoring these economic indicators, particularly in light of ongoing global economic uncertainties.

In a broader context, the implications of the euro area's balance of payments are significant for its economic policy framework. Dr. Michael Schmidt, an economist at the University of Frankfurt, stated, “The consistent surplus indicates a strong export performance and a robust economic recovery, which are crucial for maintaining the euro's stability in international markets.”

Overall, the current economic landscape shows that while the euro area faces challenges, particularly in income distribution and external investments, its underlying economic fundamentals remain strong. As policymakers and economists assess these trends, the focus will be on sustaining this momentum amid evolving global economic conditions.