Balance of payments: OCTOBER 2007
19/12/2007 - Press Releases
Current account balance
In October 2007, the current account deficit grew by
€798 million year-on-year, to reach €2,854 million. This month saw a widening
mainly of the trade deficit and, secondarily, of the income account deficit, as
well as a narrowing of the surplus of the current transfers balance. These
developments were only partly offset by an increase in the surplus of the
The year-on-year increase of €770 million in the overall
trade deficit is attributable to, mainly, a €391 million rise in net payments
for purchases of ships and, secondarily, increases of €194 million and €185
million in the trade deficit excluding oil and ships and the net oil import bill
The overall surplus of the services balance widened by €277
million, as a result of, mainly, an increase (of €271 million) in net transport
receipts and, secondarily, a small decline (of €32 million) in net payments for
other services. By contrast, net travel receipts decreased by €26 million during
The €128 million rise in the income account deficit is mainly
attributable to higher net interest, dividend and profit payments.
Finally, the surplus of the current transfers balance fell
considerably year-on-year, because general government payments to the EU were
higher than the corresponding receipts. (It should be recalled that gross
current transfers from the EU mainly include receipts from the Guarantee Section
of the European Agricultural Guidance and Guarantee Fund (EAGGF) in the context
of the Common Agricultural Policy, as well as receipts from the European Social
Fund, while current transfers to the EU include Greece’s contributions
(payments) to the Community Budget.)
In January-October 2007, the current account deficit
expanded by €5,634 million over the same period of 2006 and reached €23,831
million, reflecting the growth mainly of the trade deficit and, secondarily, of
the income account deficit, as well as – to a smaller extent – a decrease in the
current transfers surplus. By contrast, the services surplus rose.
The €4,557 million rise in the overall trade deficit was
mainly a result of increases (of €2,941 million and €1,679 million) in the trade
deficit excluding oil and ships and in net payments for purchases of ships,
respectively, while the net oil import bill showed a small decline (of €63
million). With respect to the trade balance excluding oil and ships, export
receipts grew by €544 million or 5.7%, i.e. less than the corresponding import
bill, which rose by €3,485 million or 12.2%.
The services surplus expanded by €1,032 million, reflecting a
rise mainly in net transport receipts. The increase in net travel receipts was
small, while net payments for other services grew. It should be noted that gross
transport receipts (mainly from merchant shipping) increased by 15.5% and gross
travel receipts by 1.0%.
The income account deficit rose by €1,578 million, as a
result of higher net interest, dividend and profit payments. This development is
associated with a rise in non-residents' public debt
holdings, as well as the increase in interest rates.
Finally, underlying the decline of €532 million in the
current transfers surplus were decreases mainly in net receipts of the other
sectors (i.e. excluding general government) and, secondarily, in general
government net receipts from the EU (of €353 million and €179 million,
respectively). It should be noted that EU current transfers to general
government rose by €30 million, while payments to the EU grew by €209 million.
Capital transfers balance
In October 2007, the capital transfers balance showed
a small surplus of €12 million, compared with €70 million in October 2006.
(Capital transfers from the EU mainly include receipts from the Structural Funds
- except for the European Social Fund -
and the Cohesion Fund under the Community Support Framework.)
In January-October 2007, the capital transfers balance
showed a surplus of €2,523 million, €388 million up year-on-year. This reflects
a rise in EU capital transfers to general government. Thus, the overall
transfers balance (current transfers plus capital transfers) recorded a surplus
of €4,518 million, compared with €4,662 million in the same period of 2006.
Combined current account and capital transfers balance
(according to the old method of presentation)
The combined current account and capital transfers balance
(according to the old method of presentation) showed a deficit of €2,842 million
in October 2007, compared with a deficit of €1,986 million in the same
month of 2006. In January-October 2007, this deficit came to €21,308
million, compared with €16,062 million in the same period of 2006.
Financial account balance
In October 2007, residents'
direct investment abroad came to €161 million, of which €99 million concerned
capital injections by EUROBANK to its branches in Poland (related to the
expansion of the bank's network). During the same month,
non-residents' investment in Greece recorded an inflow of
€152 million, of which €30 million concerned the participation of T.B.U.
INTERNATIONAL (Luxembourg) in the share capital increase of DIONYSUS LEISURE S.A.
Under portfolio investment, a net outflow of €584 million was
recorded, reflecting mainly the fact that net outflows of residents'
funds for purchases of foreign bonds and Treasury bills (worth €2,291 million)
more than offset inflows of non-residents' funds for
purchases of Greek government bonds and Treasury bills (worth €612 million) and
shares of Greek firms (worth €546 million).
"Other" investment recorded a net inflow of €3,006 million,
mainly because of a rise in non-resident credit institutions'
deposit and repo holdings in Greece.
In January-October 2007, direct investment showed a
net outflow of €2,460 million. Specifically, net inflows of non-residents'
funds for direct investment in Greece came to €833 million, while net outflows
of residents' funds for direct investment abroad reached
€3,293 million. During the same period, a net inflow of €15.7 billion was
recorded under portfolio investment, as the inflow of non-residents'
funds for investment in Greece (mainly in Greek government bonds and Treasury
bills, of €23.4 billion, as well as shares of Greek firms, of €8.4 billion) was
considerably higher than outflows of residents' funds for
investment mainly in foreign bonds and Treasury bills (worth €14.7 billion), as
well as foreign shares (worth €0.9 billion). Finally, under "other"
investment, a net inflow of €8.4 billion mainly reflects the fact that the
inflow of non-residents' funds for investment in deposits
and repos in Greece was almost double the outflow of residents'
funds for investment in deposits and repos abroad. At end-October 2007, Greece's
reserve assets reached €2.3 billion. (It should be recalled that, since Greece
joined the euro area in January 2001, reserve assets, as defined by the European
Central Bank, include only monetary gold, the "reserve position" with the IMF,
"Special Drawing Rights", and Bank of Greece claims in foreign currency on
residents of non-euro area countries. Conversely, reserve assets do not include
claims in euro on residents of non-euro area countries, claims in foreign
currency and in euro on residents of euro area countries, and the Bank of Greece
participation in the capital and the reserve assets of the ECB.)
Note: Balance of payments data for November 2007 will
be released on 25 January 2008.