Balance of Payments: December 2023
20/02/2024 - Press Releases
- In December 2023, the current account deficit decreased year-on-year, mainly due to an improvement in the balance of goods and the secondary income account and, to a lesser extent, in the balance of services, while the primary income account deteriorated.
- In 2023, the current account deficit shrank year-on-year, owing to an improvement in the balance of goods, the balance of services and the secondary income account, which was partly offset by a worsening of the primary income account.
Current account
In December 2023, the current account deficit decreased by €459.8 million year-on-year to stand at €2.2 billion.
Τhe goods deficit narrowed as imports fell more than exports in absolute terms. At current prices, exports declined by 19.6% (‑17.9% at constant prices) and imports fell by 14.9% (‑9.5% at constant prices). More specifically, non-oil goods exports at current prices fell by 18.9% (‑20.3% at constant prices) and the corresponding imports dropped by 10.2% (-9.7% at constant prices).
The services surplus widened. This development is attributed mostly to an improvement in the balance of other services, and, to a lesser extent, the travel services balance, which was partly offset by a deterioration in the transport balance. Compared with December 2022, non-residents’ arrivals rose by 32.0% and the relevant receipts grew by 41.5%.
The deficit of the primary income account widened year-on-year, as net receipts from other primary income decreased and net interest, dividend and profit payments increased. The surplus of the secondary income account rose considerably compared with December 2022, reflecting a shift from net payments to net receipts in the general government sector, owing to the disbursement of the third tranche under the Recovery and Resilience Facility (RRF).
In 2023, the current account deficit decreased by €7.1 billion year-on-year to stand at €14.1 billion. The goods deficit shrank, reflecting a larger drop in imports than exports. At current prices, exports fell by 8.0% (‑4.1% at constant prices) and imports dropped by 12.3% (‑4.6% at constant prices). More specifically, non-oil goods exports at current prices declined by 2.7%, while the corresponding imports decreased by 2.8% (‑6.5% and ‑4.0%, at constant prices, respectively).
The services surplus widened due to an improvement in, primarily, the balance of travel services and, secondarily, the other services balance, which was partly offset by a deterioration in the transport balance. Compared with the previous year, non-residents’ arrivals grew by 17.6% and the relevant receipts increased by 15.7%.
The deficit of the primary income account deteriorated markedly year-on-year on the back of higher net interest, dividend and profit payments. The secondary income account recorded a surplus, against a deficit in 2022, mostly due to a shift from net payments to net receipts in general government and, to a lesser extent, due to higher net receipts in the other sectors of the economy excluding general government.
Capital account
In December 2023, the capital account surplus increased year-on-year to reach €853.3 million, reflecting an increase in general government net receipts mainly related to the inflow of RRF funds.
In 2023, the capital account surplus shrank year-on-year to stand at €2.7 billion, due to a shift from net receipts to net payments in the other sectors of the economy excluding general government.
Combined current and capital account
In December 2023, the deficit of the combined current and capital account (corresponding to the economy’s external financing requirements) nearly halved to €1.4 billion.
In 2023, the deficit of the combined current and capital account fell steeply by €6.7 billion year-on-year to €11.5 billion.
Financial account
In December 2023, direct investment saw net disinvestments of €216.9 million in residents’ external assets and net disinvestments of €129.9 million in residents’ external liabilities, without any notable transactions.
In portfolio investment, a decrease in residents’ external assets was almost exclusively due to a €116.0 million decline in their holdings of foreign bonds and Treasury bills. A rise in residents’ external liabilities was associated with an increase of €220.0 million in non-residents’ holdings of Greek equities, which was offset by a €188,0 million drop in their holdings of Greek bonds and Treasury bills.
In other investment, residents’ external assets rose on the back of a €132.0 million increase in residents’ deposit and repo holdings abroad and a €79.0 million statistical adjustment associated with the issuance of banknotes. An increase in residents’ external liabilities reflected primarily a rise of €5.2 billion in non-residents’ deposit and repo holdings in Greece (including the TARGET account) and, to a lesser extent, a €79.0 million statistical adjustment associated with the issuance of banknotes, which was offset to a degree by a €3.6 billion drop in residents’ outstanding debt to non-residents (inflow of RRF loans and early repayment of euro-area loans included).
In 2023, direct investment showed a €3.2 billion flow into residents’ external assets and a €4.5 billion flow into residents’ external liabilities representing non-residents’ direct investment in Greece.
In portfolio investment, a rise in residents’ external assets was almost exclusively due to a €2.8 billion increase in their holdings of foreign bonds and Treasury bills. An increase in residents’ external liabilities was due, primarily, to a rise of €4.1 billion in non-residents’ holdings of Greek bonds and Treasury bills and, secondarily, to a €1.5 billion increase in non-residents’ holdings of Greek equities.
In other investment, a drop in residents’ external assets was attributable to a decline of €7.1 billion in residents’ deposit and repo holdings abroad, which was primarily offset by a €5.1 billion statistical adjustment associated with the issuance of banknotes, and, to a lesser extent, by a €457.3 million rise in loans extended to non‑residents by domestic financial institutions. An increase in residents’ external liabilities was associated with the €5.1 billion statistical adjustment with regard to the issuance of banknotes, and, to a lesser extent, with a €4.1 billion increase in non-residents’ deposit and repo holdings in Greece (the TARGET account included), which was partly offset by a decline of €5.5 billion in residents’ outstanding debt to non‑residents.
At end-December 2023, Greece’s reserve assets stood at €12.3 billion, compared with €11.3 billion at end-December 2022.
Note: Balance of payments data for January 2024 will be released on 22 March 2024.