Balance of payments: October 2016
21/12/2016 - Press Releases
In October 2016, the current account showed a deficit of €198 million, against a surplus of €265 million in the same month of 2015. This development is attributable to the deterioration in the primary and secondary income accounts and a small increase in the deficit of the balance of goods compared with October 2015. By contrast, the surplus of the services balance rose. The overall balance of goods and services improved, as total exports of goods and services grew faster (7.8%) than the corresponding imports (5.9%).
The deficit of the balance of goods recorded a small increase, as the improvement in the balance of goods excluding oil was offset by higher net oil imports. Non-oil exports rose year-on-year, by 2% and 3.8% at current and constant prices, respectively. Moreover, it should be noted that in October receipts from sales of ships increased significantly year-on-year.
The surplus of the services balance rose by €75 million as a result of an improvement in the travel balance. In particular, in October non-residents' arrivals rose by 17.3% and the corresponding receipts by 14.2%.
In October 2016, the primary and the secondary income accounts deteriorated year-on-year. The decrease in the surplus of the primary income account is mainly attributable to lower net receipts under other income, which includes taxes and subsidies on products and production, while the deterioration in the secondary income account mainly resulted from a rise in general government net payments.
In the January-October 2016 period, the current account showed a surplus of €1.2 billion, down by €919 million year-on-year. In particular, the lower deficit of the balance of goods did not offset a decline in the surplus of the services balance, which resulted in a deterioration in the overall balance of goods and services. Moreover, the primary income account deteriorated, while the secondary income account improved.
The balance of goods showed an amelioration of €729 million, which reflects the improved oil balance and reduced net payments for purchases of ships. By contrast, the deficit of the balance of goods excluding oil and ships grew, chiefly on account of an increase in the value of imports, while the value of the corresponding exports remained almost unchanged. It should be noted that, at constant prices, total exports of goods rose by 7.2%, reflecting mainly a rise in the volume of oil exports, while non-oil exports of goods also grew by 3%.
The surplus of the services balance dropped by €1.7 billion year-on-year, mainly due to a significant decline in net transport receipts, which is largely attributable to capital controls. Net travel receipts also recorded a fall. Total non-residents' arrivals increased by 4.7%, while the corresponding receipts declined by 4.2%. These developments were offset to a small extent by an improvement in the other services balance.
In the January-October 2016 period, the primary income account showed a surplus of €541 million, down by €87 million year-on-year, due to higher net interest, dividend and profit payments and lower net receipts under other income. Finally, the deficit of the secondary income account narrowed by €134 million, on account of lower general government net payments and, most importantly, higher net receipts of the sectors other than general government.
In October 2016, the capital account showed a €27 million surplus, well below the surplus in the same month of 2015, while in the January-October 2016 period it showed a surplus of €639 million, down by €1.0 billion year-on-year.
Combined current and capital account
In October 2016, the combined current and capital account (corresponding to the economy’s external financing requirements) showed a deficit of €172 million, against a surplus of €1.4 billion year-on-year. In the January-October 2016 period, a surplus of €1.9 billion was recorded, reduced by half year-on-year.
In October 2016, under direct investment, residents' external assets fell by €80 million. The most important transaction is a disinvestment and concerns the completion of the transfer of 100% of National Bank of Greece's stake in private equity funds managed by NBGI Private Equity Limited (United Kingdom) to private equity funds managed by Deutsche Bank Private Equity and Goldman Sachs Asset Management PLC.
Residents' external liabilities (non-residents' direct investment in Greece) recorded an increase of €536 million. The most important transaction concerns the sale of 88.5% of the shares of Astir Palace Vouliagmenis S.A. to Apollo Investment Holdco SARL (Luxembourg).
Under portfolio investment, the rise in residents' external assets by €784 million is mainly attributable to a rise in residents' holdings of foreign bonds and Treasury bills, which was partly offset by a decline in their holdings of foreign equities. A €280 million increase in liabilities reflects mainly a decline in non-residents' holdings of Greek government bonds and Treasury bills.
Under other investment, a decrease of €1.4 billion in residents' assets mainly reflects the statistical adjustment related to holdings of euro banknotes (down by €653 million) and a decline in residents' (credit institutions' and institutional investors') deposit and repo holdings abroad (by €775 million). Liabilities in this category also decreased by €1.3 billion. In particular, a €3.4 billion decline in non-residents' deposit and repo holdings in Greece (including the TARGET account) and a €723 million decrease due to the statistical adjustment related to holdings of euro banknotes were largely offset by an increase in the net outstanding debt of the public and the private sector to non-residents (primarily related to a new ESM loan of €2.8 billion to the Hellenic Republic).
In the January-October 2016 period, residents' assets from direct investment abroad declined by €889 million, while the corresponding liabilities, that represent non-residents' direct investment in Greece, increased by €2.3 billion, against a rise of €703 million in the same period of 2015.
Under portfolio investment, residents' external assets registered an increase of €6.1 billion, which is mainly attributable to a rise of €8.3 billion in residents' holdings of foreign bonds and Treasury bills, which was partly offset by a decrease of €2.3 billion in residents' investment in foreign equities. Residents' external liabilities fell by €2.2 billion, mainly on account of a decline in non-residents' holdings of Greek government bonds and Treasury bills.
Under other investment, a decline of €12.7 billion in residents' external assets largely reflects a decrease of €8.0 billion in resident credit institutions' and institutional investors' deposit and repo holdings abroad, and a drop owing to the statistical adjustment related to holdings of euro banknotes (€4.5 billion). On the liabilities side, a drop of €8.0 billion was recorded, which is attributable both to a decrease of €9.7 billion in non-residents’ deposit and repo holdings in Greece (the TARGET account included) and to the effect of the statistical adjustment (down by €5.1 billion). These developments were partly offset by a €6.7 billion increase in the outstanding debt of the public and the private sector to non-residents.
At end-October 2016, Greece's reserve assets stood at €6.7 billion, compared with €5.4 billion at end-October 2015.
Note: Balance of payments data for November 2016 will be released on 20 January 2017.
Related link: Balance of payments: October 2016 - Table