Balance of Payments: August 2022
21/10/2022 - Press Releases
- In August 2022, the current account surplus decreased year‑on‑year, mainly due to a deterioration of the secondary income account and the balance of goods and, to a lesser extent, of the primary income account, which was partly offset by an improvement in the balance of services.
- In the January‑August 2022 period, the current account deficit grew year‑on‑year, chiefly owing to a worsening of the balance of goods, as well as of the primary and the secondary income account, which was offset to a degree by an improvement in the balance of services.
Current account
In August 2022, the current account surplus dropped by €952.5 million year‑on‑year and stood at €449.1 million.
A rise in the deficit of the balance of goods is accounted for by a larger, in absolute terms, increase in imports than in exports. Exports grew by 70.3% at current prices (21.3% at constant prices) and imports rose by 48.8% at current prices (19.3% at constant prices). In particular, non‑oil exports of goods grew by 36.2% at current prices (15.6% at constant prices) and non‑oil imports of goods rose by 23.8% at current prices (15.2% at constant prices). It should be noted that the large increase in oil exports and imports is mainly associated with a rise in the corresponding prices.
An increase in the surplus of the services balance is due to an improvement of, primarily, the travel balance and, secondarily, the transport and other services balances. Non-residents’ arrivals rose by 44.0% and the relevant receipts by 28.1% year‑on‑year. It should be noted that, compared with August 2019, arrivals stood at 86.8% and receipts almost reached the corresponding level (98.5%). The surplus of the transport balance increased on the back of an improvement in the sea transport surplus.
The primary income account deficit grew year‑on‑year, owing mainly to higher net interest, dividend and profit payments. The secondary income account registered a deficit, against a surplus in the same month a year earlier, due to lower receipts by the general government.[1]
In the January‑August 2022 period, the current account deficit increased by €4.2 billion year‑on‑year and stood at €10.0 billion.
A rise in the deficit of the balance of goods is accounted for by a faster increase in imports than in exports. Exports grew by 43.3% at current prices (7.0% at constant prices) and imports increased by 48.1% at current prices (21.6% at constant prices). Specifically, non‑oil exports and imports of goods grew by 27.5% and 30.5%, respectively, at current prices (10.4% and 21.5% at constant prices).
A rise in the surplus of the services balance is mainly due to an improvement in the travel balance, as well as in the transport and other services balances. Non‑residents’ arrivals rose by 121.8% and the relevant receipts by 92.1% year‑on‑year, representing 87.6% and 96.4% of their respective levels in 2019. Net transport receipts increased by 29.3%.
The primary income account registered a small deficit, against a surplus in the same period of 2021, mainly due to a drop in net receipts of other primary income. The secondary income account surplus fell, as a result of lower net receipts in the general government balance.
Capital account
In August 2022, the capital account surplus decreased year‑on‑year and stood at €258.6 million, as a result of lower net receipts in the general government balance.1 In the January‑August 2022 period, the capital account surplus declined year‑on‑year and stood at €2.2 billion, mainly as a result of lower net receipts in the general government balance.
Combined current and capital account
In August 2022, the surplus of the combined current and capital account (corresponding to the economy's external financing requirements) dropped to €707.8 million. In the January‑August 2022 period, the deficit of the combined current and capital account increased by €5.0 billion year‑on‑year and stood at €7.8 billion.
Financial account
In August 2022, under direct investment, residents’ external assets decreased by €198.0 million and residents’ external liabilities increased by €306.3 million, without any remarkable transactions.
Under portfolio investment, a decrease in residents' external assets is chiefly attributable to a decline of €199.0 million in residents' holdings of foreign bonds and Treasury bills. A decrease in their liabilities is almost entirely attributable to a drop of €1.4 billion in non‑residents’ holdings of Greek bonds and Treasury bills.
Under other investment, residents’ increased external assets reflect a rise of €114.0 million in loans extended to non‑residents and a €153.0 million statistical adjustment related to the issuance of banknotes, which were partly offset by a €111.0 million decrease in residents’ deposit and repo holdings abroad. A decline in their liabilities reflects a decrease of €169.0 million in non-residents’ deposit and repo holdings in Greece (the TARGET account included) and a decline of €144.2 million in the outstanding debt to non‑residents, which were partly offset by a €153.0 million statistical adjustment related to the issuance of banknotes.
In the January‑August 2022 period, under direct investment, residents’ external assets increased by €983 million and residents’ external liabilities, which represent non‑residents’ direct investment in Greece, rose by €4.7 billion.
Under portfolio investment, a net increase in residents’ external assets is mainly due to a rise of €9.4 billion in residents’ holdings of foreign bonds and Treasury bills. A net increase in their liabilities is almost exclusively due to a rise of €851.0 million in non‑residents’ holdings of Greek bonds and Treasury bills.
Under other investment, a drop in residents’ external assets is due to a decline of €5.3 billion in residents’ deposit and repo holdings abroad, which was partly offset by a €3.3 billion statistical adjustment associated with the issuance of banknotes. An increase in residents’ external liabilities reflects chiefly a rise of €8.4 billion in non‑residents’ deposit and repo holdings in Greece (including the TARGET account) and a €3.3 billion statistical adjustment associated with the issuance of banknotes, which was partly offset by a decline of €4.1 billion in the outstanding debt to non‑residents.
At end-August 2022, Greece’s reserve assets stood at €11.1 billion, compared with €12.1 billion at end‑August 2021.
Note: Balance of payments data for September 2022 will be released on 21 November 2022.
[1] It should be noted that a disbursement of a pre‑financing payment under the Recovery and Resilience Facility (RRF) had been recorded in August 2021.