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Balance of payments: JANUARY-APRIL 2000

10/07/2000 - Press Releases

January – April 2000

In the January – April 2000 period, the current account deficit rose by EUR 1,397 million relative to the corresponding period of last year and stood at EUR 2,806 million. This development mainly resulted from an increase in the trade deficit, while the surplus on current transfers grew considerably during the same period. However, the increase in the current account deficit was concentrated exclusively in the first quarter of the year, while the April deficit was slightly lower than in the April 199 figure.

Regarding the trade balance in the first four months of 2000, both the fuel deficit and the non-oil deficit increased, by EUR 774 million and EUR 1,778 million respectively. In this respect, it should be noted that fuel expenditure more than tripled in the January-April 2000 period relative to the corresponding period of 1999, chiefly as a result of world crude oil prices which rose to an average of USD 25.8 per barrel over the period under review, from USD 12.3 per barrel in the same period of 1999. The higher non-oil trade deficit reflected a strong increase (of EUR 1,858 million) in the import bill, largely accounted for by almost equal increases in three major categories of goods, i.e. i) machinery and computer equipment, ii) electrical appliances and wire and mobile telephone equipment and iii) passenger cars. Imports in the first two categories were closely related with increased investment activity, while passenger car imports are still supported by a rapid – although decelerating – increase in consumer loans.

The balance on services did not change significantly in the January-April 2000 period compared with the corresponding period a year earlier, as both receipts and payments for travel and transportation increased. The income deficit rose slightly (by EUR 159 million), mainly owing to an increase in interest, dividends and profits payments, which more than offset a rise in the respective inflows. Finally, the balance on current transfers improved considerably and its surplus rose by EUR 1,275 million, largely reflecting higher EU transfers (January-April 1999: EUR 1,624 million, January-April 2000: EUR 2,971 million).

In the financial account, direct investment recorded net outflows of EUR 222 million, mainly related to exports of capital by resident enterprises to finance participation in enterprises located abroad, most notably in central and east-European countries. By contrast, portfolio investment recorded net inflows of EUR 2,765 million, chiefly reflecting acquisitions of Greek government securities by non-residents. Finally, the "other investment" category showed a capital repatriation of EUR 1,163 million, as well as capital exports by non-residents amounting to EUR 2,949 million. For the most part, these flows concern deposits, in particular by credit institutions.

As a result of these developments, Greece's official reserves dropped to USD 16.7 billion by the end of April 2000, compared with USD 18.9 billion at the end of December 1999. According to the latest available data, the country's official reserves stood at USD 15.7 billion at the end of June 2000.

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