Balance of payments: April 2015

22/06/2015 - Press Releases

Balance of Payments – April 2015 (1)

Current account balance

In April 2015, the current account balance showed a deficit of €955 million, down by €196 million year-on-year. This improvement is largely due to a decrease (of €175 million) in the deficit of the balance of goods and services.

The deficit of the balance of goods decreased by €75 million year-on-year, on account of lower net payments for purchases of ships. By contrast, the net oil import bill rose by €297 million. Also, imports of goods excluding oil and ships increased by 6.5%, while the corresponding exports remained almost unchanged year-on-year.

The surplus of the services balance improved by €100 million, on account of improvements in the travel services balance and in the other services balance, while the surplus of the transport services balance shrank year-on-year. The surplus of the travel services balance increased by €90 million, mainly as a result of a 28.3% rise in non-residents' arrivals in April and of a 16.3% hike in the corresponding receipts. The improved picture of the other services balance is due to the fact that in April 2014 it included payments of a fee to the IMF related to public sector borrowing under the support mechanism.

Underlying the above developments was also a decrease in the deficit of the secondary income account, while the primary income account deteriorated slightly.

In the January-April 2015 period, the current account balance showed a deficit of €3.1 billion, up by €830 million year-on-year. This increase is primarily attributable to the deterioration in the primary and the secondary income accounts, and secondarily to a decline in the surplus of the services balance. By contrast, the balance of goods showed an improvement, which more than offset the decline in the surplus of the services balance, resulting in an improvement in the overall balance of goods and services.

The deficit of the balance of goods decreased by €434 million, on account of lower net payments for purchases of ships and a lower net oil import bill. By contrast, the deficit of the balance of goods excluding oil and ships increased. It should be noted that receipts from exports of goods excluding oil and ships registered a rise (of 1.8%), as did the corresponding import bill, which grew by 8.6%.

The surplus of the services balance shrank, as net transport and other services receipts registered a decline, which was only partly offset by a rise in net travel receipts. In the January-April 2015 period, total non-residents’ arrivals increased by 39.1% year-on-year, but the corresponding receipts grew by a mere 14.4%.

In the January-April 2015 period, the surplus of the primary income account narrowed, mainly on account of higher net payments related to investment income (interest, dividends, and profits) and lower net other primary income. Moreover, the secondary income account recorded a deficit, against a small surplus in the same period of 2014.

Capital account balance

In April 2015, the capital account did not show any remarkable change. In the January-April 2015 period, the capital account showed a surplus of €462 million, down by €986 million year-on-year.

Combined current and capital account balance

In April 2015, the combined current and capital account balance (corresponding to the economy's external financing requirements) showed a deficit of €974 million, down by €191 million year-on-year. In the January-April 2015 period, a deficit of €2.7 billion was recorded, against a deficit of €858 million in the same period of 2014.

Financial account balance

In April 2015, no remarkable changes were recorded under direct investment.

Under portfolio investment, a net decrease of €138 million in residents’ external assets reflects mainly a decline of €827 million in residents’ holdings of foreign bonds and Treasury bills, which offset an increase of €617 million in residents’ investment in shares of foreign firms. A decrease of €348 million in residents’ net external liabilities reflects mainly a drop in non-residents’ investment in Greek government bonds and Treasury bills.

Under other investment, a net increase (of €2.5 billion and €3.6 billion respectively) in residents' external assets and liabilities reflects mainly the statistical adjustment that relates to the issue of banknotes (2). In addition, the net increase in assets is attributable to a rise of €406 million in residents' deposit and repo holdings abroad. At the same time, the net increase in liabilities is attributable to a net rise of €2.0 billion in non-residents’ deposit and repo holdings in Greece (the TARGET account included) and to a net decline of €471 million in the outstanding debt of the public and the private sector to non-residents (of which €460 million concern principal payments to the IMF under the support mechanism).

In the January-April 2015 period, residents’ net assets from direct investment abroad rose by €80 million, while the corresponding liabilities that represent non-residents’ direct investment in Greece declined by €50 million.

Under portfolio investment, a net decrease of €6.0 billion in residents’ external assets is mainly due to a drop of €11.3 billion in residents’ holdings of foreign bonds and Treasury bills, which was partly offset by a rise of €5.2 billion in residents’ investment in shares of foreign firms. Moreover, residents’ net external liabilities fell by €2.8 billion, mainly on account of a decline in non-residents’ investment in Greek government bonds and Treasury bills and in shares of Greek firms.

Finally, under other investment, a net increase in residents' external assets and liabilities reflects mainly the statistical adjustment that relates to the issue of banknotes, as already mentioned (3). In addition, in the January-April 2015 period, residents’ deposit and repo holdings abroad recorded a net increase of €5.4 billion, and non-residents’ deposit and repo holdings in Greece recorded a net rise of €21 billion (the TARGET account included). These developments were considerably offset by a decrease in residents’ outstanding debt.

At end-April 2015, Greece's reserve assets stood at €5.9 billion, compared with €5.2 billion at end-April 2014.

Note: Balance of payments data for May 2015 will be released on 21 July 2015.

(1) It should be noted that, as from reference month January 2015, the presentation of the balance of payments is based on the Balance of Payments Manual 6th edition (BPM6). For more information on the transition to the new BPM6 methodology, see the relevant Press Release published by the Bank of Greece on 23 March 2015.

(2) It should be noted that, as from January 2015, under other investment, the statistical adjustment that relates to the issue of (euro) banknotes above the key for subscription to the European Central Bank’s capital is also recorded under liabilities, representing liabilities of the Bank of Greece vis-à-vis the Eurosystem. This entry is offset by an entry of the same amount under assets, representing residents’ assets vis-à-vis the Eurosystem. In April 2015, the increase in assets that relates to the statistical adjustment stands at €2,098 million and the corresponding increase in liabilities at €2,154 million.

(3) See footnote 2. In the January-April 2015 period, the increase in assets that relates to the statistical adjustment stands at €10.9 billion and the corresponding increase in liabilities at €11 billion.