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Balance of payments: January 2012

20/03/2012 - Press Releases

Current account balance

In January 2012 the current account balance showed a deficit of €1.5 billion, down by €1.3 billion or 45.9% year-on-year.

The trade deficit fell by €894 million, as a result of declines of €539 and €137 million in the net import bill for oil and ships, respectively, as well as a decrease of €218 million in the trade deficit excluding oil and ships. It should be noted that the reduction shown in the net oil import bill is attributable to base effects, since net payments in January 2011 included increased expenditure which also concerned imports of the year 2010 (the relevant payment had been deferred by the importer). The trade deficit excluding oil and ships fell mainly due to a €215 million (or 23.6%) rise in export receipts, whereas the corresponding import bill remained virtually unchanged (-0.1%).

The services surplus increased by €218 million as a result of higher net transport receipts and the evolution of the “other” services balance, which showed a small surplus, compared with deficits in January of both 2011 and 2010. Finally, the deficit of the travel services balance was €28 million lower year-on-year. In more detail, travel spending in Greece by non-residents decreased by 9.4% (according to data from the Bank of Greece’s border survey, non-residents’ arrivals fell by 2.8%), while travel spending abroad by residents of Greece decreased by 19.0%. Gross transport receipts (chiefly from merchant shipping) showed no significant change (-1.2%), but the corresponding payments fell markedly (by 13.9%); as a result, net receipts grew by 16.0%.

The income account deficit shrank by €44 million, owing to a decline in net payments for interest, dividends and profits.

Finally, the current transfers surplus grew by €109 million year-on-year, reflecting a rise of €98 million in general government net transfer receipts (chiefly from the EU). Concurrently, the “other sectors” (mainly emigrants’ remittances) showed lower net transfer payments than in January 2011. (It should be recalled that gross current transfers from the EU mainly include receipts from the European Agricultural Guidance and Guarantee Fund (EAGGF), as well as receipts from the European Social Fund, while current transfers to the EU include Greece’s contributions (payments) to the Community Budget.)

Capital transfers balance

In January 2012, the capital transfers balance showed a deficit which came to €24.4 million, i.e. doubling year-on-year, exclusively reflecting a rise in net capital transfer payments of sectors other than general government. (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.)

Finally, the overall transfers balance (current transfers plus capital transfers) recorded a surplus of €765 million, up by €97 million year-on-year.

Combined current account and capital transfers balance

In January 2012, the combined current account and capital transfers balance (corresponding to the economy’s external financing requirements) showed a deficit of €1.5 billion, compared with a deficit of €2.8 billion in January 2011 (down by 45.2%).

Financial account balance

In January 2012, non-residents’ direct investment in Greece showed a net outflow of €116 million, compared with a net outflow of €63 million in January 2011, mainly due to negative reinvested earnings (i.e. losses rather than profits on the balance sheets of companies with direct investments in Greece). Residents’ direct investment abroad recorded a net outflow of €47 million (compared with a net outflow of €49 million in January 2011), without any remarkable transaction.

Under portfolio investment, a net outflow of €82 million was recorded (compared with a net outflow of €926 million in January 2011). This outflow is attributable to, mainly, a €200 million rise in residents’ holdings of foreign bonds and Treasury bills, and an €84 million increase in residents’ investment in foreign derivatives. There was also a €29 million decline in non-residents’ holdings of shares of Greek firms (outflow). These developments were partly offset by a €145 million inflow as a result of non-residents’ increased investment in Greek government bonds and Treasury bills and an €86 million inflow due to a decrease in residents’ holdings of shares of foreign firms.

Under “other” investment, a net inflow of €2.2 billion was recorded (compared with a net inflow of €3.1 billion in January 2011). This inflow is chiefly attributable to €2.0 billion increase in non-residents’ deposit and repo holdings in Greece and a €1.65 billion decrease in residents’ deposit and repo holdings abroad (inflow). These developments were offset by a €1.3 billion decline in the outstanding debt of the public and the private sector to non-residents (outflow). A net outflow of €46 million was also recorded as a result of increased lending to non-residents.

At end-January 2012, Greece’s reserve assets stood at €5.3 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 February 2012 will be released on 19 April 2012.

Related link: Balance of payments January 2012 - table

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