Balance of payments: December 2014

20/02/2015 - Press Releases

Current account balance

In December 2014, the current account balance showed a deficit of €870 million, up by €626 million year-on-year. This development is mainly attributable to the fact that the current transfers balance showed a deficit, against a surplus in the same month of 2013, on account of a decline in general government net current receipts from the EU. In the same month, the income account deficit grew, while the trade deficit contracted and the surplus of the services balance recorded a small increase.

The trade deficit narrowed by €171 million year-on-year, owing to a significant fall in the net oil import bill. By contrast, net payments for purchases of ships and other goods increased. It should be noted that export receipts rose, while the overall import bill did not change considerably, since the higher import bill for ships and other goods was offset by the lower oil import bill.

The surplus of the services balance widened by just €25 million year-on-year, exclusively on account of the improved (sea and air) transport services balance. By contrast, the travel and other services balances deteriorated.

In 2014, the current account balance showed a surplus of €1.7 billion, compared with €1.1 billion in the previous year. In addition, the overall balance of goods and services recorded a surplus of €1.8 billion, against a deficit of €251 million in 2013. This development is attributable to a significant improvement in the services balance. It should be noted that, in 2014, total exports of goods and services rose by 8.4% (compared with 1.9% in 2013). In more detail, receipts from exports of goods increased by 4.9%, while receipts from services rose by 11.2%.

The trade deficit grew by €747 million in 2014, mainly on account of higher net payments for purchases of ships. By contrast, the net oil import bill fell. Finally, the trade deficit excluding oil and ships widened, as a result of the higher import bill, which offset the higher export receipts.

The €2.8 billion rise in the surplus of the services balance in 2014 is due to higher net receipts from travel, transport and other services. Specifically, travel spending by non-residents in Greece grew by 10.6% compared with 2013, reflecting a 23% rise in non-residents’ arrivals.

The income account deficit fell by €233 million in 2014, mainly as a result of lower net interest payments. Finally, the current transfers surplus contracted by €1.7 billion year-on-year, chiefly as a result of lower general government transfer receipts from the EU, and stood at €2.7 billion.

Capital transfers balance

In December 2014, the capital transfers balance showed a surplus of €245 million, which was far higher than the surplus recorded in December 2013. In 2014, the surplus of the capital transfers balance came to €2.5 billion, compared with €3.0 billion in 2013.

The overall transfers balance (current transfers plus capital transfers) recorded a surplus of €5.2 billion in 2014, compared with €7.5 billion in 2013.

Combined current account and capital transfers balance

The combined current account and capital transfers balance (corresponding to the economy’s external financing requirements) showed, in 2014, a surplus of €4.2 billion, up by €38 million year-on-year.

Financial account balance

In December 2014, residents’ direct investment abroad recorded an increase of €130 million. The most important transaction concerns an outflow of €100 million for the purchase of real estate in Italy by NBG Pangaea Real Estate Investment Company (through the Italian real estate investment company FONDO PICASSO). Non-residents’ direct investment in Greece rose by €217 million. The most important transaction concerns an inflow of €160 million for the participation of parent company Crystal Almond SARL (Luxembourg) in the capital increase of Wind Hellas.

Under portfolio investment, a net outflow of €960 million was recorded, which is mainly attributable to a rise in residents’ investment in foreign shares, as well as a decline in non-residents’ holdings of Greek government bonds and Treasury bills.

Under other investment, a net inflow of €1.9 billion was recorded, mainly due to a net increase (inflow of €4.2 billion) in non-residents’ deposit and repo holdings in Greece, which was partly offset by residents’ loan repayments amounting to €1.1 billion, as well as by an increase (outflow of €1.2 billion) in residents’ deposit and repo holdings abroad.

In 2014, non-residents’ direct investment in Greece recorded a net inflow of €1.6 billion, while residents’ direct investment abroad showed a net outflow of €645 million.

Under portfolio investment, a net outflow of €7.0 billion was recorded, as the net outflow (€8.9 billion) for residents’ investment abroad was partly offset by a rise in liabilities (€1.9 billion). The latter was mainly the result of a rise in non-residents’ investment in shares of Greek firms (€8.2 billion), which was largely offset by a decrease in non-residents’ investment in Greek government bonds and Treasury bills.

Under other investment, the net inflow of €3.8 billion, reflecting a rise in residents’ liabilities, is due to a net increase in the outstanding debt of the public and the private sector to non-residents (inflow of €5.7 billion), and was partly offset by a drop in non-residents’ deposit and repo holdings in Greece (outflow of €1.7 billion).

At end-December 2014, Greece’s reserve assets stood at €5.1 billion, compared with €4.2 billion at end-December 2013.

Note: Balance of payments data for January 2015 will be released on 23 March 2015.