Balance of payments: APRIL 2003
20/06/2003 - Press Releases
Current account balance
In April 2003, the current account balance remained almost unchanged
year-on-year, recording a €1,062 million deficit. This resulted from a narrowing of the
non-oil trade deficit and the income account deficit, as well as from a widening of the
services surplus. These developments were offset by an increase in net oil imports and,
most notably, a decrease in the transfers surplus.
In particular, underlying the narrowing of the trade deficit were a
rise in non-oil export receipts and especially a decline in the non-oil import bill. By
contrast, the net oil import bill increased year-on-year. The growth of the services
surplus stemmed from an increase in net receipts from transport and, to a lesser extent,
travel services, while net payments for other services remained unchanged. The income
account deficit narrowed, mainly due to reduced interest payments on Greek government
bonds held by non-residents. Finally, the decline in the transfers surplus reflects a fall
in the net receipts of general government (mainly net receipts from the EU).
In January-April 2003 the non-oil trade deficit decreased, whereas the
services surplus grew. In the same period, however, there was a widening of the oil
deficit and the income account deficit and a narrowing of the transfers surplus. As a
result, the current account deficit rose by €609 million over the same period in 2002.
The non-oil trade deficit declined by €525 million in January-April
2003 as a result of a €159 million rise in export receipts and a fall (of €367
million) in the import bill. At the same time, the net oil import bill increased by €530
million. Over the same period, the services surplus grew, as the drop in net receipts from
travel services was more than offset by the rise in net receipts from transport services.
The income account deficit widened by €146 million, mainly owing to an increase in net
payments for interest, dividends and profits, as well as to a decline in net receipts from
fees and wages. Finally, underlying the narrowing (by €712 million) of the transfers
surplus was mainly a reduction in transfers from the EU. By contrast, net transfers to the
other sectors grew.
Financial account balance
In April 2003, direct investment showed a net outflow of €65 million.
Under portfolio investment, a net inflow of €1,973 million was recorded, mainly
reflecting non-residents' investment in Greek bonds, which was only partly offset by an
outflow for purchases of foreign bonds by residents. Finally, as regards "other
investment", a net outflow of €1,179 million was observed, connected mainly to a
decrease in deposits and repo holdings abroad by residents, as well as to reduced deposits
and repo holdings of non-residents.
In January-April 2003, a net outflow of €436 million was observed
under direct investment, mainly associated with residents’ investment abroad. During the
same period, a substantial net inflow of €6,680 million was recorded under portfolio
investment. This development is connected to a sizeable inflow of foreign investors’
funds, mainly for the purchase of Greek bonds. It should be pointed out that there was
also a notable outflow of funds mainly for the purchase of bonds by Greek investors.
Finally, under ‘‘other investment’’, a net outflow of €6,015 million was
recorded. This is associated with a considerable increase in deposits and repo holdings
abroad by residents, substantial general government loan repayments and a decrease in
deposits and repo holdings by non-residents.
At end-April 2003, Greece’s reserve assets stood at €5.0 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" at the IMF, "Special Drawing Rights", and Bank of
Greece's 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 payment data for May 2003 will be released on 19 July