Press Releases

Balance of Payments: June 2021

20/08/2021 - Press Releases

• In June 2021, the current account deficit dropped year-on-year, mainly due to an improvement in the services balance and, to a lesser extent, the primary and secondary income accounts, which was partly offset by a deterioration in the balance of goods.
• In the first half of 2021, the current account deficit grew year-on-year, due to a deterioration in the balance of goods and the secondary income account, which was partly offset by an increase in the surplus of the primary income account and, secondarily, the services balance.

Current account

In June 2021, the current account of the balance of payments showed a deficit of €1.3 billion, down by €88 million year‑on‑year.

The increase in the deficit of the balance of goods is accounted for by a larger rise in imports than in exports. Specifically, exports increased by 36.7% and 11.9% at current and constant prices, respectively, while imports rose by 43.4% and 19,0% at current and constant prices, respectively. In particular, non-oil exports of goods grew by 30.0% and 22.5% at current and constant prices and non-oil imports by 33.4% and 30.9% at current and constant prices, respectively.

The services surplus rose, owing to an improvement in the travel balance. By contrast, the transport and the other services balances deteriorated year‑on‑year. Non‑residents’ arrivals and the relevant receipts increased markedly, as a result of base effects following their low levels in 2020. Nevertheless, travel receipts turned out at a mere 31% of their level in June 2019. The surplus of the transport balance fell by 7.5%, although the sea transport balance improved.

In June 2021, the deficit of the primary income account declined year-on-year, mainly due to higher net receipts in the category of other primary income and, to a lesser extent, lower net payments in the category of interest, dividend and profits. The secondary income account balance improved, reflecting net general government receipts, against net payments in June 2020.

In the first half of 2021, the current account deficit increased by €446 million year‑on‑year and stood at €7.5 billion.

A rise in the deficit of the balance of goods is due to the fact that imports increased more than exports in absolute terms. In more detail, exports grew by 29.4% and 14.8% at current and constant prices, respectively, while imports rose by 23.8% at current prices and 7.3% at constant prices. Specifically, non‑oil exports and imports of goods grew at around the same rate (23.1% and 23.5%, respectively) at current prices, while at constant prices they increased by 19.4% and 22.5%, respectively.

The rise in the services surplus is due to an improvement in the travel balance, which however was partly offset by a decrease in the transport surplus, as well as a deterioration in the other services balance. Non‑residents’ arrivals fell by 20.4%, while relevant receipts grew by 51.0% year‑on‑year, still standing at a mere 20% of their 2019 level. Net transport receipts dropped by 22.3%. Lastly, the surplus of the primary income account rose, chiefly due to lower interest, dividend and profit payments, while the secondary income account deficit increased.

Capital account

In June 2021, the capital account registered a surplus, compared with a small deficit in June 2020, and stood at €291 million. In the first half of 2021, the capital account surplus increased year‑on‑year to stand at €714 million.

Combined current and capital account

In June 2021, the deficit of the combined current and capital account (corresponding to the economy's external financing requirements) dropped by €379 million relative to June 2020 and stood at €1.0 billion. In the first half of 2021, the deficit of the combined current and capital account rose to €6.8 billion, from €6.5 billion one year earlier.

Financial account

In June 2021, under direct investment, residents' external assets increased by €136 million and residents' external liabilities rose by €579 million.

Under portfolio investment, an increase in residents’ external assets is almost exclusively attributable to a rise of €9.6 billion in residents’ holdings of foreign bonds and Treasury bills. An increase in residents' external liabilities is due to a rise of €888 million in non‑residents' holdings of Greek government bonds and Treasury bills.

Under other investment, an increase in residents' external assets reflects mainly a statistical adjustment (of €456 million) associated with the issuance of banknotes. A rise in their liabilities reflects mainly an increase of €9.6 billion in non‑residents’ deposit and repo holdings in Greece (the TARGET account included).[1]

In the first half of 2021, under direct investment, residents' external assets increased by €776 million and residents' external liabilities, which represent non‑residents' direct investment in Greece, rose by €2.3 billion.

Under portfolio investment, an increase in residents' external assets is chiefly attributable to a rise of €11.6 billion in residents' holdings of foreign bonds and Treasury bills. A rise in residents' external liabilities is due to an increase of €2.3 billion in non‑residents' holdings of Greek government bonds and Treasury bills.

Under other investment, a rise in residents’ external assets reflects an increase of €2.3 billion in loans extended to non‑residents, which was partly offset by a decrease of €1.5 billion in residents’ deposit and repo holdings abroad. A rise in residents’ liabilities reflects chiefly an increase of €9.1 billion in non‑residents’ deposit and repo holdings in Greece (the TARGET account included) and, secondarily, a €5.8 billion rise in the outstanding debt to non‑residents.

At end‑June 2021, Greece’s reserve assets stood at €9.1 billion, compared with €8.9 billion at end‑June 2020.

Related information: Balance of payments data for July 2021 will be released on 20 September 2021.