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Balance of Payments: March 2019

21/05/2019 - Press Releases

Current account

In March 2019, the current account deficit came to €1.5 billion, up by €352 million year-on-year, as a result of an increase in the deficit of the balance of goods, and notwithstanding the improved services balance. Additionally, the primary and secondary income accounts deteriorated.

The deficit of the balance of goods grew, mainly owing to a worsening of the oil balance, as the relevant exports decreased and imports increased. Similar developments were registered in non-oil exports and imports of goods, although at lower rates of change.

The surplus of the services balance expanded, as a result of an improvement in primarily the transport balance and, secondarily, the other services balance. Specifically, the rise in net transport receipts is mostly due to higher net sea transport receipts (up by 21%) compared with March 2018. The travel balance remained virtually unchanged, as the increase in relevant receipts was offset by an almost equal rise in payments. Specifically, non-residents’ arrivals and relevant receipts grew by 9.1% and 32.2%, respectively.

Lastly, a decline in the surplus of the primary income account is mainly attributable to a drop in net receipts from other primary income, while a worsening of the secondary income account was primarily a result of a widening of the deficit of the general government account.

In the first quarter of 2019, the current account deficit came to €3.7 billion, up by €420 million year-on-year, as the improved services balance and primary income account only partly offset a deterioration of the balance of goods and the secondary income account.

The deficit of the balance of goods grew, owing to a worsening of both the oil balance and the balance of other goods. Exports of goods rose by a mere 1.0% at current prices and dropped by 3.8% at constant prices. However, non-oil exports of goods rose by 4.3% at current prices and by 5.7% at constant prices. Imports of goods grew by 6.0% at current prices and 4.1% at constant prices.

The surplus of the services balance increased, as a result of an improvement in primarily the transport balance and, secondarily, the travel and other services balances. Sea transport receipts rose by 18.9%. At the same time, non-residents’ arrivals and the relevant receipts rose by 7.8% and 37.2%, respectively.

Lastly, an improvement of the primary income account is attributable to lower net interest, dividend and profit payments, while the worsening of the secondary income account is attributable to a shift of the general government account from surplus to deficit.

Capital account

In March 2019, the capital account registered a deficit of €67 million, compared with a surplus of €8 million year-on-year. In the first quarter of 2019, the capital account did not change substantially year-on-year.

Combined current and capital account

In March 2019, the combined current and capital account (corresponding to the economy’s external financing requirements) showed a deficit of €1.6 billion, up by €427 million year-on-year. In the first quarter of 2019, the deficit stood at €3.5 billion, up by €421 million year-on-year.

Financial account

In March 2019, under direct investment, an increase of €277 million was recorded in residents' external liabilities (non-residents' direct investment in Greece). The most important transactions concerned: (a) the sale of Piraeus Insurance and Reinsurance Brokerage S.A. (a Piraeus Bank subsidiary) to Matrix Insurance and Reinsurance Brokers S.A. (United Kingdom); (b) the participation of Nevine Holdings LTD (Cyprus) in the capital increase of Alpha Satellite Television S.A. and Alpha Radio S.A.; and (c) the participation of Cetracore Energy GmbH (Austria) in the capital increase of Cetracore-Jetoil S.A.

Under portfolio investment, an increase in residents' external assets is chiefly attributable to a rise of €653 million in residents' holdings of foreign bonds and Treasury bills. An increase in residents' external liabilities is mainly due to a rise of €2.6 billion in non-residents' holdings of Greek government bonds and Treasury bills.

Under other investment, a decrease in residents' external assets mainly reflects a decline of €527 million in residents' (credit institutions, institutional investors and corporations) deposit and repo holdings abroad. A decline in external liabilities is primarily attributable to a drop of €1.4 billion in non-residents’ deposit and repo holdings in Greece (the TARGET account included).

In the first quarter of 2019, under direct investment, residents' external liabilities (non-residents' direct investment in Greece) rose by €774 million and their external assets by €83 million.

Under portfolio investment, a drop in residents' external assets is chiefly attributable to a decrease of €933 million in residents' holdings of foreign bonds and Treasury bills. An increase in residents' external liabilities is mainly due to a rise of €5.8 billion in non-residents' holdings of Greek government bonds and Treasury bills.

Under other investment, a decrease in residents' external assets mainly reflects a decline of €1.6 billion in residents' (credit institutions, institutional investors and corporations) deposit and repo holdings abroad. A decline in external liabilities is primarily attributable to a drop of €6.3 billion in non-residents’ deposit and repo holdings in Greece (the TARGET account included).

At end-March 2019, Greece’s reserve assets stood at €6.5 billion, recording a marginal increase compared with March 2018.

Note: Balance of payments data for April 2019 will be released on 20 June 2019

Related link: Balance of payments: March 2019 - Table

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