EU achieves significant current account surplus in early 2025
- The European Union reported a current account surplus of 114 billion euros in Q1 2025, which is 2.5 percent of its GDP.
- There has been a significant growth in trade, particularly in goods and services, contributing to a robust trade surplus.
- These results emphasize the importance of strengthening trade relationships while addressing deficits in primary income.
In the first quarter of 2025, the European Union reported a current account surplus of 114 billion euros, equating to 2.5 percent of its GDP. This substantial surplus demonstrates a recovery from prior periods of lower surplus, as it reflects an increase from 88.9 billion euros in the last quarter of 2024. However, when contrasted with the surplus recorded in the first quarter of the previous year, which stood at 132.3 billion euros, it indicates a decline over the annual comparison period. Trade in goods played a predominant role in this surplus, generating 117.9 billion euros, a notable increase from 85.5 billion euros from the previous quarter. Additionally, the services sector contributed a surplus of 46.1 billion euros, growing from 42.1 billion euros recorded in the fourth quarter of 2024. Conversely, there was a marked increase in the primary income balance deficit, which escalated from 10.1 billion euros to 21.3 billion euros. Similarly, the secondary income deficit saw a slight rise from 28.6 billion euros to 28.7 billion euros. Another notable aspect of the EU's financial position was the capital account, which recorded a surplus of 2.9 billion euros, a turnaround from a deficit of 1.9 billion euros in the previous quarter. Regionally, the EU's trade surplus with the United Kingdom was the largest, totaling 67.9 billion euros, followed by the United States at 12.8 billion euros and Switzerland at 12.3 billion euros. China recorded the largest trade deficit for the EU, amounting to 49.2 billion euros, followed by India at 2.4 billion euros and Russia at 1.2 billion euros. These financial results point to a mix of positive trade balances across several nations while highlighting significant areas for concern in the deficits experienced in primary and secondary income balances. The figures illustrate the dynamic nature of the EU's economic landscape, influenced by both trade flows and external income factors, making it necessary for policymakers to address trade relationships and income generation strategies moving forward.