Balance of payments: January 2014
24/03/2014 - Press Releases
Current account balance
January 2014
The current account balance showed a deficit of €295 million, down by €19 million year-on-year. This development is exclusively due to the improved income account, which recorded a surplus, against a deficit in January 2013, because the trade deficit rose and the services and current transfers surpluses fell slightly.
The €105 million increase in the trade deficit is attributable to the higher net oil import bill, while the non-oil trade deficit narrowed as a result of a decrease in the import bill which was stronger than the reduction in export receipts.
A slight decline (of €9 million) in the services surplus is accounted for by a worsening of the “other” services balance (mainly attributable to insurance services), which was for the most part offset by an increase in net transport (mainly sea transport) and travel receipts. In more detail, travel spending in Greece by non-residents increased by 22.4% year-on-year, reflecting a 10.6% rise in non-residents’ arrivals over the same period, according to the Bank of Greece’s border survey. (It should be pointed out that data on travel spending by non-residents in Greece include, in addition to the Bank of Greece’s Border Survey data also cruise data).
In January 2014, the current transfers balance recorded a surplus of €885 million, down by €16 million year-on-year, mainly on account of the higher receipts from the reallocation of ECB monetary income that were recorded in January 2013, compared with the same month of this year.
Capital transfers balance
In January 2014, the capital transfers balance showed a deficit of €13 million, slightly higher year-on-year. This mainly reflects a decline in net EU capital transfers to general government.
Finally, the overall transfers balance (current transfers plus capital transfers) showed a surplus of €872 million in 2014, down by €20 million over 2013.
Combined current account and capital transfers balance
In January 2014, the combined current and capital transfers balance (corresponding to the economy’s external financing requirements) showed a deficit of €308 million, against €323 million in the same month of 2013.
Financial account balance
In January 2014, non-residents’ direct investment in Greece showed a net outflow (decline) of €44 million (against a net inflow of €556 million in the same month of 2013), without any remarkable transaction. Residents’ direct investment abroad recorded a net outflow (increase) of €105 million (compared with a net outflow of €44 million in January 2013). The most remarkable transaction concerned an outflow of €64 million for the participation of Alpha Bank in the capital increase of its subsidiary in Cyprus, Alpha Bank Cyprus.
Under portfolio investment, a net outflow of €2.2 billion was recorded (against a net inflow of €882 million in January 2013). This is mainly due to a decline in non-residents’ holdings of Greek bonds and Treasury bills, as well as a rise in residents’ investment in foreign bonds and Treasury bills (outflow).
Under “other” investment, a net inflow of €2.2 billion was recorded (against a net outflow of €1.4 billion in January 2013), mainly on account of a €3.2 billion increase (inflow) in non-residents’ deposit and repo holdings in Greece (including the TARGET account). These developments were offset by a €600 million increase (outflow) in resident credit institutions’ and institutional investors’ deposit and repo holdings abroad, as well as a €353 million decline (outflow) in the outstanding debt of the public and the private sector to non-residents.
At end-January 2014, Greece’s reserve assets stood at €4.6 billion, compared with €5.4 billion at end-January 2013.
Note: Balance of payments data for February 2014 will be released on 17 April 2014.
Related link: Balance of payments: January 2014 - Table