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Balance of Payments: JUNE 2002

17/09/2002 - Press Releases

Current account balance

In June 2002, the current account balance recorded a 544 million euro deficit, i.e. 195 million euro smaller than in June 2001. This decrease resulted mainly from the substantial increase in the services surplus.

Over the same period, the trade deficit increased slightly by 52 million euro, due to the widening of the non-oil trade deficit, while the net fuel import bill decreased in comparison with June 2001. As far as the services balance is concerned, the increase in net travel and transport receipts caused the surplus to rise by 469 million euro. By contrast, the transfers surplus narrowed in June, mainly because of the reduction in net EU transfers. Finally, the income account deficit increased by 78 million euro, owing to the rise in net payments for interest, dividends and profits.

During the first half of 2002, the current account deficit increased by 391 million euro, compared with that in the corresponding 2001 period, and stood at 4,388 million euro. This development is due on the one hand to the widening of the trade deficit and the income account deficit and on the other hand to the narrowing of the transfers surplus. These negative developments were partly offset by the substantial rise in the services surplus.

The non-oil trade deficit increased by 180 million euro during the first half of 2002, because export receipts fell by 254 million euro, whereas the import bill decreased by 74 million euro. Net oil imports rose by 77 million euro over the period under review. At the same time, the increase (of 589 million euro) in net receipts from travel and "other" services offset the fall in net transport receipts, resulting in an increase of 354 million euro in the services surplus. It should be noted at this point that, as from May 2002, statistical data on travel receipts and payments are derived according to a new methodology. This methodology is based on a sample survey ("border survey"), hence data may not be fully comparable with those of previous periods. The income account deficit increased mainly because of the rise in net payments for interest, dividends and profits. Finally, the transfers surplus decreased by 372 million euro, although net EU transfers, which constitute the main item of the category, decreased by only 20 million euro compared with the first half of 2001.

Financial account balance

In June 2002, direct and portfolio investment recorded net inflows of 98 million and 959 million euro respectively. Direct investment inflows in particular include an amount of about 55 million euro for the acquisition of a further participation in the Commercial Bank's share capital by Credit Agricole. "Other investment" showed an outflow, attributable to the decrease in non-residents' deposits in Greece.

During the first half of 2002, direct and "other" investment recorded net outflows of 174 million and 193 million euro respectively. Non-residents' investment showed a small positive movement, given that the significant inflow in June 2002 more than offset the outflow during the previous months of the year. During the period under review, portfolio investment recorded a substantial net inflow (of 6,516 million euro), connected with the large inflow of funds (7,402 million euro) for the purchase of Greek government bonds by foreign investors. The outflow (1,355 million euro) for the purchase of foreign bonds by Greek investors was also notable. The fact that both foreign and Greek investors have turned to the bonds market reflects the uncertainty prevailing in international capital markets.

As a result of the developments in the current account and the financial account balances, Greece's reserve assets came to 8.2 billion euro at end-June 2002.

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