Balance of payments: NOVEMBER 2004
20/01/2005 - Press Releases
Current account balance
In November 2004, the current account deficit grew by
€116 million over the same month of 2003. This development is due to the
substantial increase in the trade deficit, which was largely offset by a rise in
the services and the transfers surplus. There was no significant change in the
income account balance.
Specifically, the widening of the trade deficit is mainly
accounted for by an increase in the non-oil trade deficit, while the net oil
import bill also rose. The services surplus improved considerably, as a result
of an increase in net transport receipts, while net travel receipts remained
virtually unchanged and net payments for ''other'' services grew. Finally, the
year-on-year rise in the transfers surplus mainly reflects increased net EU
transfers to general government, while the net receipts of the other sectors
(emigrants' remittances etc.) declined slightly.
In January-November 2004, the current account deficit
came to €5,084 million, showing a considerable improvement (by €1,972
million) over that of the corresponding period of 2003. This development mainly
reflects a substantial rise in the services surplus, an increase in the
transfers surplus, as well as a small decrease in the income account deficit,
which more than offset a strong rise in the trade deficit.
The trade deficit grew by €2,664 million relative to the
same period of 2003. Specifically, a €3,252 million (or 12.7%) increase in the
non-oil import bill more than offset a €1,113 million (or 12.5%) rise in
non-oil export receipts, whereas the net oil import bill increased by €525
million.
By contrast, developments in the services surplus were
particularly favourable. The surplus grew by €3,712 million, largely owing to
a very strong rise (of €2,661 million) in net transport receipts (mainly from
shipping) (gross transport receipts grew by €3,495 million or 40.6%) and a
€712 million increase in net travel receipts (it should be noted that gross
travel receipts rose by €845 million or 9.1%). Also, the deficit in the
''other'' services account dropped considerably over the same period of 2003.
Finally, the €836 million year-on-year growth of the
transfers surplus is accounted for by a €1,121 million increase in general
government receipts (mainly EU transfers), which far exceeded the €180
million rise in general government payments (mainly to the EU), whereas
the net receipts of the ''other'' sectors (mainly emigrants' remittances)
declined.
Financial account balance
In November 2004, no remarkable flows were recorded under
direct investment. Under portfolio investment, there was an inflow of
non-residents' funds (amounting to €843 million) mainly for purchases of Greek
companies' shares (non-resident institutional investors' purchases of National
Bank of Greece shares, in the context of the sale of 7.9% of that bank's share
capital by the Greek government), while inflows of non-residents' funds for the
purchase of Greek government securities were relatively small. These inflows
were more than offset by outflows of residents' funds, mainly for purchases of
bonds issued by non-residents. Finally, as regards "other'' investment, a
substantial inflow of non-residents' funds was recorded, mainly to deposits and
repos. This inflow was offset, by around one third, by outflows of domestic
credit institutions' and institutional investors' funds to deposits and repos
abroad.
In January-November 2004, non-residents' direct
investment in Greece reached €1,014 million, while residents' direct
investment abroad came to €450 million. (It should be recalled that the most
important direct investments by non-residents in the January-November 2004
period were the acquisition of PANAFON S.A. by VODAFONE, which was partly
effected in 2003 and completed in January and February 2004; the acquisition of
the General Bank of Greece by Societe Generale in March; the acquisition of
DELTA SINGULAR OUTSOURCING SERVICES by the US company FIRST DATA in July; the
increase in PANEUROPEAN OIL AND INDUSTRIAL HOLDINGS S.A.'s participation in the
capital of Hellenic Petroleum S.A. in August; and the acquisition of KOTSOVOLOS
S.A. by DIXONS in September.) Over the same period, a substantial net inflow of
€10,484 million was recorded under portfolio investment, as outflows of
residents' funds (mainly for the purchase of bonds abroad, amounting to €9,427
million) were more than offset by inflows of non-residents' funds (mainly for
purchases of Greek government bonds, amounting to €17,361 million). Finally, a
net outflow of €6,735 million under ''other'' investment is largely associated
with sizeable outflows of domestic credit institutions' funds (amounting to
€11,362 million) to deposits and repos abroad and - to a lesser extent -
outflows (of €1,712 million) for the repayment of loans granted to residents
by non-residents (of which €805 million for the repayment of general
government loans). These outflows more than offset inflows of non-residents'
funds to deposits and repos in Greece (€6,301 million).
At end-November 2004, Greece's reserve assets came to
€2.7 billion. (It should be recalled that since the first months of 2003 the
Bank of Greece has started to diversify its portfolio, by reducing its non-euro
area currency holdings, which are included in reserve assets, and by increasing
its higher-yield or euro-denominated assets - mainly bonds issued by euro area
Member States, which are not included in reserve assets. Given that there
is less need to maintain high foreign currency reserves, by the above
diversification the Bank of Greece has improved the return on its investments.
It has been noted repeatedly 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 in 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 December 2004 will
be released on 18 February 2005.