You are currently browsing the category archive for the ‘external balances’ category.

Bank of Italy released the Italian balance of payments data for June:

The trade balance has clearly improved by a large amount, with trade in goods registering a surplus of €2.85bn for the 12-month period ending at June 2012, compared with a deficit of €25.24bn during the corresponding period last year. Services registered a deficit of €5.35bn,almost half than €9.06bn a year ago, while the total current account balance was -€30.06bn compared with -€59.85bn.

What is worrying is the financial account. Portofolio investment made a very largw swing from +€61bn to -€84.4bn, mainly due to outflows of €95.6bn in securities (especially medium/long-term). Other investment is only positive due to a positive balance of €279.08bn from Bank of Italy. There’s actually a very large capital flight out of MFIs which instead of a positive €30.8bn balance now have a deficit of €123.7bn (a change of more than 150bn) with assets and liabilities all playing their part, while ‘other sectors’ had a €8.9bn reduction in foreign assets.

Although the Italian real tradable sector shows very strong signs of improvement, the capital flight out of Italy is very large.

About Me

Kostas Kalevras

LinkedIn profile

E-mail:kkalev AT gmail DOT com
My status
Follow on twitter
More about me...