Balance of payments: MARCH 2008
22/05/2008 - Press Releases
Current account balance
In March 2008, the current account deficit grew
by €423 million year-on-year, to reach €3,515 million, reflecting mainly a
deficit in the current transfers balance, compared with a surplus in 2007, as
well as an increase in the income account deficit. The surplus of the service
balance showed a small increase, while the trade deficit did not change
considerably.
The small year-on-year increase of €9 million in the overall
trade deficit is attributable to an increase of €245 million in the net oil
import bill, which was mostly offset by decreases of €203 million and €32
million in net payments for purchases of ships and in the trade deficit
excluding oil and ships, respectively.
The surplus of the services balance rose by €46 million, as a
result of a €61 million decline in net payments for other services and an
increase in net transport receipts (up €23 million), which more than offset a
drop in net travel receipts (down €37 million).
The €165 million rise in the income account deficit is
mainly attributable to higher net payments fir interest, dividends and profits.
The current transfers balance showed a deficit of €61 million
(compared with a surplus of €234 million in March 2007), as EU transfers to
general government decreased, while general government payments to the EU rose.
(It should be noted that gross current transfers from the EU mainly include
receipts from the Guarantee Section of the European Agricultural Guidance and
Guarantee Fund (EAGGF) in the context of the Common Agricultural Policy, as well
as receipts from the European Social Fund, while current transfers to the EU
include Greece’s contributions (payments) to the Community Budget.)
In the first quarter of 2008, the current
account deficit dropped by €667 million over the same period in 2007 and reached
€8,355 million, mainly reflecting substantial increases in the surpluses of both
the current transfers balance (recorded in February 2008) and the services
balance, which more than offset the rises in the trade deficit and the income
account deficit.
The €911 million hike in the overall trade deficit was mainly
a result of increases (of €716 million and €527 million) in the trade deficit
excluding oil and ships and in the net oil import bill, respectively. By
contrast, net payments for purchases of ships dropped by €332 million. With
respect to the trade balance excluding oil and ships, export receipts grew by
€265 million or 9.3%, while the corresponding import bill rose by €981 million
or 11%.
The surplus of the services balance expanded by €750 million,
mainly reflecting higher net transport receipts. The travel services balance
showed a small deficit (of €17 million), compared with a surplus of €23 million
in the first quarter of 2007, while net payments for other services rose. It
should be noted that gross transport receipts (mainly from merchant shipping)
increased by 32% and gross travel receipts by 5.7%.
The income account deficit rose by €258 million, as a result
of higher net interest, dividend and profit payments. This development is mainly
associated with a rise in non-residents’ public debt holdings.
Finally, the €1,086 increase in the surplus of the current
transfers balance is attributable mainly to a rise in EU transfers to general
government, as well as to a decline in general government payments to the EU.
Capital transfers balance
In March 2008, the capital transfers balance showed a
surplus of €220 million, compared with €1,076 million in March 2007. (Capital
transfers from the EU mainly include receipts from the Structural Funds – except
for the European Social Fund – and the Cohesion Fund under the Community Support
Framework.)
In the first quarter of 2008, the capital transfers
balance showed a surplus of €1,562 million (down €356 million year-on-year).
This reflects a decline in EU capital transfers to general government. Thus, the
overall transfers balance (current transfers plus capital transfers) recorded a
surplus of €3,027 million, compared with €2,296 million in 2007.
Combined current account and capital transfers
balance (according to the old method of presentation)
The combined current account and capital transfers balance (according
to the old method of presentation) showed a deficit of €3,295 million in March
2008, compared with a deficit of €2,016 million in the corresponding month of
2007. In the the first quarter of 2008, this deficit came to €6,793 million,
compared with €7,104 million in the corresponding period of 2007.
Financial account balance
In March 2008, residents’ direct investment
abroad came to €110 million. The most important investment concerned an outflow
of €47 million by the NATIONAL BANK for covering its participation in the share
capital increase of the bank ROMANEASKA (Romania). Non-residents’ investment in
Greece registered an outflow of €35 million, reflecting a decline in this
investment. The most important outflow, of €70 million, came from the sale of
the supermarket chain PLUS HELLAS by the German company TENGELMANN KKG to AB
VASILOPOULOS SA. Under portfolio investment, a net outflow of €4,362 million was
recorded, almost exclusively attributable to the fact that non-residents’ sales
of Greek government bonds and Treasury bills and, secondarily, shares of Greek
firms (of €4.4 and €0.4 billion, respectively) were offset only to a small
extent by residents’ sales of foreign shares (of €0.3 million). "Other"
investment recorded a considerable net inflow of €7,652 million, resulting from
a large increase in non-residents’ deposit and repo holdings in Greece, which
was substantially higher than the small rise in residents’ corresponding
holdings abroad.
In the first quarter of 2008, direct investment showed
a net outflow of €340 million. Specifically, net inflows of non-residents’ funds
for direct investment in Greece came to only €56 million, while net outflows of
residents’ funds for direct investment abroad reached €395 million. During the
same period, a net inflow of €6,955 million was recorded under portfolio
investment, as the inflow of non-residents’ funds for investment in Greece (exclusively
in Greek government bonds, of €11.6 billion) was considerably higher than
outflows of residents’ funds for investment in foreign bonds and Treasury bills
(worth €4.8 billion). Finally, under “other” investment, a relatively small net
outflow of €544 million is attributable to the fact that a large part of the
outflows of residents’ funds for investment in deposits and repos abroad and,
secondarily, for repayment of loans granted by non-residents to residents was
offset by inflows of non-residents’ funds for investment in deposits and repos
in Greece.
At end-March 2008, Greece’s reserve assets stood at €2.4
billion. (It should be recalled that, since Greece joined the euro area in
January 2001, reserve assets, as defined by the European Central Bank, include
only monetary gold, the "reserve position" with the IMF, "Special Drawing Rights",
and Bank of Greece claims in foreign currency on residents of non-euro area
countries. Conversely, reserve assets do not include claims in euro on residents
of non-euro area countries, claims in foreign currency and in euro on residents
of euro area countries, and the Bank of Greece participation in the capital and
the reserve assets of the ECB.)
Note: Balance of payments data for April 2008 will be
released on 24 June 2008.