Press Releases

Balance of payments: November 2013

24/01/2014 - Press Releases

Current account balance

November 2013

The current account balance showed a deficit of €744 million, down by €9 million year-on-year, mainly on account of an improvement in the current transfers balance, which recorded a surplus against a deficit in November 2012. The trade and services balances also improved, albeit to a lesser extent, while the income account balance showed a deficit, against a surplus year-on-year.

The trade deficit fell by a mere €9 million, owing to the lower net oil import bill, which was the second most significant positive development in November after the rise in current transfers. By contrast, the non-oil trade deficit increased, as a result of a decline in export receipts concurrent with a rise in the import bill.

The improvement in the services balance is attributable to higher net (mainly transport) receipts, while non-residents’ travel spending in Greece appears somewhat reduced, despite a 10.8% increase in tourist arrivals year-on-year. It should be noted that cruise receipts are excluded from travel spending, as they have already been included in the November 2012 data. (It should be pointed out that travel spending by non-residents in Greece includes, in addition to the Bank of Greece’s Border Survey data, also cruise data only for the January 2012-September 2013 period).

January-November 2013

The current account balance showed a surplus of €1.5 billion, against a deficit of €4.1 billion in the same period of 2012. This development is attributable, primarily, to a significant decline in the trade deficit (down by €2.7 billion) and, secondarily, to increases in the current transfers and services surpluses (up by €2.5 billion and €1.5 billion, respectively). By contrast, the income account deficit grew.

In more detail, the contraction of the trade deficit is largely attributable to a considerably reduced import bill (by 5.4%) for all products and, secondarily, to a 3.3% rise in export receipts. Apart from oil product exports, which account for the bulk of this increase, the contribution of the sectors of foods and beverages and non-metallic mineral products was also significant. The decline in the import bill resulted mainly from lower oil imports.

An increase in the services surplus is mainly due to higher net travel receipts and the improved “other” services balance, which offset a contraction in net transport receipts. In more detail, travel spending in Greece by non-residents grew by 14.9% year-on-year (reflecting a 15.3% rise in non-residents’ arrivals over the same period, according to the Bank of Greece’s border survey); at the same time, travel spending by residents abroad remained almost flat. (It should be noted that travel spending by non-residents in Greece includes, in addition to the Bank of Greece’s Border Survey data, also cruise data only for the January 2012-September 2013 period).

The income account deficit rose by €1.1 billion year-on-year, mainly due to higher net interest, dividend and profit payments.

Finally, the current transfers balance showed a surplus of €3.9 billion, up by €2.5 billion year-on-year. This development is mainly due to higher general government net transfer receipts (mainly from the EU).

Capital transfers balance

In November 2013, the capital transfers balance showed a surplus of €231 million, slightly lower year-on-year. By contrast, in the January-November 2013 period, as a result of higher net transfers to general government, the capital transfers balance recorded a surplus of €3 billion, up by €1.2 billion year-on-year.

Due to these developments, the overall transfers balance (current transfers plus capital transfers) showed a surplus of €6.9 billion in the January-November 2013 period, up by €3.6 billion year-on-year.

Combined current account and capital transfers balance

In November 2013, the combined current account and capital transfers balance (corresponding to the economy’s external financing requirements) showed a deficit of €513 million, compared with €500 million in November 2012. In the January-November 2013 period, this balance showed a surplus of €4.5 billion, against a deficit of €2.3 billion in the same period of 2012.

Financial account balance

In November 2013, residents’ direct investment abroad recorded an increase (outflow) of €97 million. The most remarkable transaction under this category concerned an outflow of €65 million for the participation of Alpha Bank in the capital increase of its subsidiary in Cyprus, Alpha Bank Cyprus. Non-residents’ direct investment in Greece showed a net outflow (disinvestment) of €75 million (compared with a net outflow of €222 million in the same month of 2012).

Under portfolio investment, a net inflow of €799 million was recorded (compared with a net inflow of €2.8 billion in November 2012), mainly as a result of a decline in residents’ holdings of foreign bonds and Treasury bills (inflow), and a rise in non-residents’ holdings of Greek bonds, Treasury bills and shares of Greek firms (inflow).

Under “other” investment, a net outflow of €474 million was recorded (compared with a net outflow of €1.6 billion in the same month of 2012). This outflow is chiefly attributable to a €668 million increase in resident credit institutions’ and institutional investors’ deposit and repo holdings abroad (outflow) and a €622 million net decline in the outstanding debt of the public and the private sector to non-residents (as a result of a €635 million net decline in the public sector’s outstanding debt, on account of the repayment of loans amounting to €685 million). These developments were offset by an €822 million rise (inflow) in non-residents’ deposit and repo holdings in Greece (including the TARGET account).

January-November 2013

In the January-November 2013 period, non-residents’ direct investment in Greece showed a net inflow of €747 million, whereas residents’ direct investment abroad showed a net inflow (disinvestment) of €578 million.

Under portfolio investment, a net outflow of €5.7 billion was recorded (compared with a net outflow of €74.3 billion in the same period of 2012), primarily due to a drop in non-residents’ holdings of Greek government bonds and Treasury bills. This was partly offset by inflows due to non-residents’ purchases of shares of Greek firms and a decline in residents’ investment in foreign bonds, Treasury bills and shares.

Under “other” investment, a net inflow of €531 million was recorded (compared with a net inflow of €77.3 billion in the same period of 2012). This is chiefly attributable to a €27.1 billion increase in the outstanding debt of the public and the private sector to non-residents (as a result of a €29.95 billion net increase in the outstanding debt of the public), as well as to a €16.6 billion decline in resident institutional investors’ deposit and repo holdings abroad (inflows). These developments were partly offset by a €42.1 billion decrease in non-residents’ deposit and repo holdings in Greece (outflow).

At end-November 2013, Greece’s reserve assets stood at €4.3 billion, compared with €6.0 billion at end-November 2012.

Note: Balance of payments data for December 2013 will be released on 19 February 2014.

Related link: Balance of payments: November 2013 - Table

 

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