Balance of payments: September 2018

20/11/2018 - Press Releases

Balance of payments: September 2018 (1)

Current account

In September 2018, the current account registered a surplus of €551 million, down by €428 million year-on-year, due to a deterioration in the balance of goods. The services balance and the primary and secondary income accounts improved.

The deficit of the balance of goods grew, mainly owing to a worsening in the oil balance. It should be noted that, at constant prices, total exports of goods decreased by 1.8% (non-oil exports of goods rose by 3.2%) and total imports of goods increased by 11.3% (non-oil imports of goods grew by 8%).

The surplus of the services balance expanded, owing to an improvement primarily in the transport balance, as net sea transport receipts rose by 29%, and secondarily in the travel balance. Regarding the latter, non-residents' arrivals, in September 2018, rose by 4.9% year-on-year and the corresponding receipts remained almost unchanged.

The improvements in the primary and secondary income accounts are respectively attributable to an increase in net receipts from other primary income and a decline in net general government payments.

In the January-September 2018 period, the current account recorded a deficit of €1.3 billion, against a surplus of €228 million in the same period of 2017. This development is attributable to a deterioration in the balance of goods and the primary income account, which was partly offset by an improvement in chiefly the services balance, as well as in the secondary income account.

A widening in the deficit of the balance of goods by €1.8 billion is mainly attributable to the higher net oil import bill. The non-oil goods deficit also increased to a lesser extent, although the relevant exports rose by 11.9% (11.0% at constant prices), outpacing the corresponding imports, which grew by 9.3% and 9.2% at current and constant prices, respectively. However, imports in absolute terms grew more than exports.

The surplus of the services balance rose by €776 million, on account of improvements in the travel balance and the transport balance, while the other services balance deteriorated significantly. Specifically, non-residents' arrivals and the corresponding receipts rose by 10.3% and 9.1%, respectively. Additionally, sea transport receipts also increased, by 12.6%.
Lastly, the primary income account showed a deficit, which was larger than in the same period of 2017, mainly due to higher net interest, dividend and profit payments, while the deficit of the secondary income account declined, owing to an improvement in the general government component.

Capital account

In September 2018, the capital account showed a deficit, which was larger than in the same month of 2017, due to a rise in net payments of the other (excluding general government) sectors. In January-September 2018, the surplus was lower than in the corresponding period of 2017.

Combined current and capital account

In September 2018, the combined current and capital account (corresponding to the economy’s external financing requirements) showed a surplus of €434 million, down by €524 million year-on-year. In the January-September 2018 period, the combined current and capital account recorded a deficit of €1.1 billion, against a surplus of €581 million in the same period of 2017.

Financial account

In September 2018, no remarkable changes were recorded under direct investment.
Under portfolio investment, a net increase in residents' external assets is almost exclusively due to a rise of €705 million in residents' holdings of foreign bonds and Treasury bills. A net increase in external liabilities is mainly attributable to a rise (by €1.2 billion) in non-residents' holdings of Greek government bonds and Treasury bills.

Under other investment, a net increase in residents' external assets reflects mainly the statistical adjustment related to holdings of euro banknotes (2), which offset a decline of €553 million in residents' deposit and repo holdings abroad. A net decline in external liabilities reflects mainly a net decrease of €778 million in non-residents' deposit and repo holdings in Greece (the TARGET account included).

In the January-September 2018 period, under direct investment, residents' net external assets and liabilities – the latter representing foreign direct investment – registered increases of €517 million and €2.8 billion, respectively.

Under portfolio investment, a net decrease in residents' external assets is chiefly attributable to a decline in residents' holdings of foreign equities (of €545 million), as well as of foreign bonds and Treasury bills (of €346 million). A net increase in their liabilities is mainly due to a rise of €3.4 billion in non-residents' holdings of Greek government bonds and Treasury bills.

Under other investment, a net decrease in residents' external assets is attributable to a decline of €2.5 billion in residents’ deposit and repo holdings abroad and the statistical adjustment related to holdings of banknotes (3). A net decline in external liabilities reflects mainly a drop of €25.4 billion in non-residents' deposit and repo holdings in Greece (the TARGET account included), which was largely offset by a €20.2 billion increase in the outstanding debt of the public and the private sector to non-residents.

At end-September 2018, Greece's reserve assets stood at €6.2 billion, compared with €6.6 billion in September 2017.

Note: Balance of payments statistics for October 2018 will be released on 21 December 2018.

(1) As from reference month September 2018, the Bank of Greece has adopted a new model for the calculation of sea transport aggregates. The revision was implemented retroactively as from January 2015. For more information on the transition to the new methodology, see the relevant Press Release published by the Bank of Greece concurrently.
(2) In September 2018, assets registered an increase on account of the statistical adjustment related to holdings of euro banknotes, which came to €966 million.
(3) In the January-September 2018 period, both assets and liabilities registered a decrease on account of the statistical adjustment related to holdings of euro banknotes, which came to €1.5 billion and €4.8 billion, respectively.