Balance of payments: AUGUST 2007
22/10/2007 - Press Releases
Current account balance
In August 2007, the current account deficit grew by
€75 million year-on-year, to reach €159 million. In this month there was a
considerable widening mainly of the trade deficit and, secondarily, of the
income account deficit, which was partly offset by a rise in the surpluses of
the current transfers balance and the services balance.
The year-on-year increase of €229 million in the overall
trade deficit is attributable to increases in the trade deficit excluding oil
and ships and in net payments for purchases of ships (of €381 million and €135
million respectively), whereas the net oil import bill decreased by €287 million.
The overall surplus of the services balance did not change
significantly (up €58 million), as the considerable rise in net transport
receipts and the small increase in net travel receipts were largely offset by an
increase in net payments for other services.
The €56 million rise in the income account deficit is
exclusively attributable to higher net interest, dividend and profit payments.
Finally, the surplus of the current transfers balance showed
a remarkable increase year-on-year, because net EU transfers to general
government grew. (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
In January-August 2007, the current account deficit
expanded by €4,349 million over the corresponding period of 2006 and reached
€19,266 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
The widening of the overall trade deficit by €3,297 million
was mainly a result of increases in the trade deficit excluding oil and ships
and in net payments for purchases of ships (of €2,299 million and €1,197 million
respectively), while the net oil import bill decreased by €199 million. With
respect to the trade balance excluding oil and ships, export receipts grew by
€452 million or 6.0%, while the corresponding import bill rose by €2,751 million
The services surplus expanded by €614 million, reflecting a
rise mainly in net transport receipts and, to a lesser extent, in net travel
receipts, while net payments for other services grew. It should be noted that
gross transport receipts (mainly from merchant shipping) increased by 13.1% and
gross travel receipts by 1.5%.
The income account deficit rose by €1,346 million, mainly as
a result of higher net interest, dividend and profit payments. This development
is associated with a rise in non-residents’ holdings of public debt, as well as
with the increase in interest rates.
Finally, underlying the decline of €319 million in the
current transfers surplus were on the one hand lower (by €348 million) net
receipts of the other sectors (i.e. excluding general government), while general
government net receipts from the EU grew by €29 million. It should be noted that
EU current transfers to general government rose by €285 million, while payments
to the EU grew by €255 million.
Capital transfers balance
In August 2007, the capital transfers balance showed a
small surplus of €12.6 million, compared with €1.9 million in August 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
In January-August 2007, the capital transfers balance
showed a surplus of €2,503 million, €498 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 €4,213 million, compared with €4,034 million in the corresponding period of
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 €146 million in August
2007, compared with a deficit of €82 million in the same month of 2006. In
January-August 2007, this deficit came to €16,763 million, compared with
€12,912 million in the corresponding period of 2006.
Financial account balance
In August 2007, residents' direct investment abroad
came to €122 million, of which €35 million concerned the purchase of real estate
in Romania by EUROBANK PROPERTIES S.A. During the same month, non-residents'
direct investment in Greece recorded an outflow of €87 million. The most
important outflows concerned the withdrawal of GENERAL BISCUIT S.A. from the
share capital of PAPADOPOULOS BISCUITS S.A. and the withdrawal of VALTOP
HOLDINGS LTD (Cyprus) from DODONI S.A. (amounting to €104 million and €20
Under portfolio investment, a net outflow of €2,108 million
was recorded, which is due to the fact that the net inflow of non-residents'
funds for purchases of Greek government bonds and Treasury bills (which came to
€780 million) was more than offset by an outflow of residents' funds for
purchases of foreign bonds and Treasury bills (worth €1,223 million and €232
million respectively), by the rise in residents' holdings of shares of foreign
firms and financial derivatives (by €278 million and €148 million respectively),
as well as by the decline in non-residents’ holdings of shares of Greek firms (by
"Other" investment recorded a net inflow of €2,616 million,
mainly because of a rise in non-resident credit institutions' deposit and repo
holdings in Greece.
In January-August 2007, direct investment showed a net
outflow of €2,211 million. Specifically, net inflows of non-residents' funds for
direct investment in Greece came to €806 million, while net outflows of
residents' funds for direct investment abroad reached €3,017 million. During the
same period, a net inflow of €13,325 million 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 €17.2 billion, as well as
shares of Greek firms, of €7.5 billion) was considerably higher than the
outflows of residents' funds for investment mainly in foreign bonds and Treasury
bills (worth €9.9 billion), as well as in foreign shares (worth €1.0 billion).
Finally, under "other" investment, a net inflow of €5.7 billion mainly reflects
the fact that the inflow of non-residents' funds for investment in deposits and
repos in Greece more than offset the outflow of residents' funds for investment
in deposits and repos abroad.
At end-August 2007, Greece's reserve assets reached
€2.1 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 September 2007 will
be released on 20 November 2007.