Press Releases

Balance of Payments: October 2019

20/12/2019 - Press Releases

Current account

In October 2019, the current account showed an improvement, registering a deficit of €673 million, down by €241 million year-on-year. This development is primarily attributable to an improvement in the balance of goods and, to a smaller extent, in the primary income account, which was partly offset by a decrease in the surplus of the services balance and a small rise in the deficit of the secondary income account.

The deficit of the balance of goods shrunk by €353 million, as imports decreased more than exports. It should be noted that the decrease in total exports of goods reflects a fall in oil exports, while non-oil goods exports increased (by 3.3% and 4.0% at current and constant prices, respectively). Imports of goods registered a 11.2% decline at current prices. 

The decrease of €126 million in the surplus of the services balance is due to the deterioration of all sub-accounts. However, travel receipts increased by 4.1% and non-residents’ arrivals rose by 1.9% year-on-year.

The deficit of the primary income account decreased mainly on account of lower net interest, dividend and profit payments, while the deficit of the secondary income account recorded a slight increase.

In the January-October 2019 period, the deficit of the current account shrunk considerably and stood at €697 million, down by €1.6 billion year-on-year. This development reflects a rise in the surplus of the services balance and an improvement in the primary and secondary income accounts, which offset a widening in the deficit of the balance of goods.

The deficit of the balance of goods grew, owing to a worsening in the non-oil goods balance. It should be noted that both exports and imports have slowed significantly year-on-year. Total exports of goods remained virtually unchanged, showing a marginal rise of 0.4% at current prices (1.4% at constant prices), while non-oil goods exports grew by 4.5% (4.9% at constant prices). Total imports of goods increased by 1.4% at current prices (1.2% at constant prices), with non-oil goods imports rising by 4.2% at current prices (4.1% at constant prices).

A rise in the surplus of the services balance is due to an improvement in, primarily, the travel balance and, secondarily, the transport balance, while the deficit of the other services balance deteriorated. Travel receipts and non-residents’ arrivals increased by 13.1% and 3.7%, respectively, year-on-year. Transport (mainly sea transport) receipts increased by 5%.

The deficit of the primary income account narrowed on account of lower net interest, dividend and profit payments, while the deficit of the secondary income account came close to zero, due to an improvement in the general government sector.

 

Capital account

In October 2019, the deficit of the capital account fell, standing at €8 million, while in the January-October 2019 period, the capital account registered a surplus of €206 million, which was almost double the surplus of the same period in 2018.

 

Combined current and capital account

In October 2019, the combined current and capital account (corresponding to the economy’s external financing requirements) showed a deficit of €682 million, down by €294 million year-on-year. In the January-October 2019 period, the combined current and capital account recorded a deficit of €492 million, compared with a deficit of €2.2 billion in the same period of 2018.

 

Financial account

In October 2019, under direct investment, residents’ net external assets rose by €67 million, without any remarkable transactions. Residents’ net external liabilities (which represent non-residents’ direct investment in Greece) rose by €575 million; the most important transaction concerned the sale of credit servicer Intrum Hellas and real estate management company Intrum Hellas REO Solutions S.A., owned by Piraeus Bank, to Intrum Holding Spain S.A. (Spain).

Under portfolio investment, a net increase in residents’ external assets is mainly attributable to a rise of €615 million in their holdings of foreign bonds and Treasury bills. A net decrease in their liabilities is attributable to a drop of €959 million in non-residents’ holdings of Greek government bonds and Treasury bills.

Under other investment, a net decrease in residents’ external assets is due to a decline of €888 million in residents’ deposit and repo holdings abroad and to a drop of €111 million in loans extended to non-residents. A net increase in their liabilities reflects a rise of €441 million in non-residents’ deposit and repo holdings in Greece (the TARGET account included).

In the January-October 2019 period, under direct investment, residents’ net external assets increased by €340 million and their net external liabilities rose by €3.2 billion.

Under portfolio investment, a net increase in residents’ external assets is due to a rise of €25.1 billion in residents’ holdings of foreign bonds and Treasury bills. A net increase in their liabilities is accounted for by a rise of €3 billion in non-residents’ holdings of Greek government bonds and Treasury bills.

Under other investment, a net decrease in residents’ external assets reflects a decline of €4.4 billion in residents’ deposit and repo holdings abroad. A net increase in their liabilities reflects mainly a rise of €21.1 billion in non-residents’ deposit and repo holdings in Greece (the TARGET account included).

At end-October 2019, Greece’s reserve assets stood at €7.4 billion, compared with €6.5 billion at end-October 2018, mainly on account of valuation changes.

 

Note: Balance of payments data for November 2019 will be released on 20 January 2020.

Related link: Balance of Payments: October 2019 - Table

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