Balance of Payments: AUGUST 2009
19/10/2009 - Press Releases
Current account balance
In August 2009, the current account deficit did
not show any remarkable change in comparison with August 2008 and came to €425
million. A relatively large contraction of the trade deficit and a smaller
decrease in the income account deficit were offset by drops in, mainly, the
surplus of the services balance and, secondarily, the surplus of the current
transfers balance.
The €921 million fall in the overall trade deficit stemmed
from declines of €425 million, €308 million and €188 million in the trade
deficit excluding oil and ships (as the drop in the import bill was, at absolute
prices, almost triple the decrease in export receipts), the net oil import bill
and net payments for purchases of ships, respectively.
The surplus of the services balance shrank by €793
million, mainly owing to a fall in net transport and travel receipts (of €448
million and €320 million, respectively). Specifically, non-residents’ travel
spending in Greece dropped by 10.7% year-on-year, while residents’ travel
spending abroad rose by 9.7%. Gross transport receipts (mainly from shipping)
fell substantially (by 38.7%). The income account deficit decreased by €56
million, mainly owing to lower net interest, dividend and profit payments.
Finally, the current transfers balance showed a deficit of €43 million, compared
with a surplus of €150 million in August 2008, mainly because general government
receipts from the EU fell and the corresponding payments rose. (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 Budget.)
In January-August 2009, the current account deficit
narrowed by €5,059 million or 23.2% year-on-year and came to €16,771 million,
reflecting mainly a large decrease in the trade deficit and – to a much lesser
extent – a decline in the income account deficit. At the same time, however, the
surpluses of the services balance and the current transfers balance shrank
considerably.
The €9,460 million drop in the overall trade deficit is
attributable to decreases of €5,363 million, €3,177 million and €920 million in
the trade deficit excluding oil and ships, the net oil import bill and net
payments for purchases of ships, respectively. Regarding the trade deficit
excluding oil and ships, the import bill fell by €6,941 million or 25.3%, i.e.
much more than export receipts, which declined by €1,578 million or 17.4%.
The €3,655 million contraction in the surplus of the
services balance mainly reflects lower net transport and travel receipts. Gross
transport receipts (chiefly from merchant shipping) fell considerably (by
31.3%); as a result, net transport receipts dropped by €2,430 million. Also,
travel spending by non-residents in Greece decreased by 13.2%, while travel
spending by residents abroad declined by 5%; as a result, net travel receipts
fell by €1,063 million. Finally, payments for “other” services grew by €161
million.
The income account deficit dropped by €334 million year-on-year,
because net interest, dividend and profit payments decreased as a result of
developments in international money and capital markets. Finally, the surplus of
the current transfers balance narrowed by €1,080 million due to, mainly, lower
EU transfers to general government and, secondarily, higher government payments
to the EU.
Capital transfers balance
In August 2009, the capital transfers balance
showed a surplus of €278 million, down by €109 million year-on-year. (Capital
transfers mainly include receipts from the Structural Funds – except for the
European Social Fund – and the Cohesion Fund under the Community Support
Framework.)
In January-August 2009, the capital transfers
balance showed a surplus of €1,534 million, compared with €2,973 million in the
same period of 2008. This mainly reflects a decline in EU capital transfers to
general government. Thus, the overall transfers balance (current transfers plus
capital transfers) recorded a surplus of €3,039 million, compared with €5,558
million in the same period of 2008.
Combined current account and capital transfers balance
The deficit of the combined current account and capital
transfers balance (which reflects the economy’s external financing requirements)
came to €147 million in August 2009, compared with €27 million in August 2008.
In the January-August 2009 period, this deficit reached €15,237 million,
compared with €18,857 million in the same period of 2008, i.e. it dropped by
19.2%.
Financial account balance
In August 2009, non-residents’ direct investment
in Greece recorded a net inflow of €101 million. The most important transaction
in this category concerned a €60 million inflow for the participation of Hofer
KG (Austria) in the share capital increase of Aldi Hellas Supermarket LP.
Residents’ direct investment abroad showed a net outflow of €39 million, with no
remarkable transactions.
Under portfolio investment, a net outflow of €2.7 billion was
recorded, mainly reflecting a €5.8 billion increase (outflow) in residents’
purchases of foreign bonds and Treasury bills. This outflow was only partly
offset by a €3.2 billion rise (inflow) in non-residents’ investment in Greek
government bonds and Treasury bills.
Under “other” investment, a net inflow of €2.6 billion was
recorded, which is mainly attributable to a €2.5 billion decrease (inflow) in
residents’ deposit and repo holdings abroad. During the same period, a €3.3
billion decline (outflow) in non-resident credit institutions’ and institutional
investors’ deposit and repo holdings in Greece was fully offset by a €3.4
billion inflow of funds due to securitisation of corporate loans by banks.
In January-August 2009, direct investment showed
a net inflow of €1.7 billion. Specifically, net inflows of non-residents’ funds
for direct investment in Greece came to €2,280 million (compared with €2,750
million in the corresponding period of 2008), while net outflows of residents’
funds for direct investment abroad reached €548 million (compared with €1,748
million in the corresponding period of 2008).
During the same period, a net inflow of €21.1 billion
was recorded under portfolio investment. This mainly reflects inflows due to non-residents’
purchases of Greek government bonds and Treasury bills (of €29.5 billion), while
an outflow was observed due to, mainly, a €7.4 billion increase in residents’
holdings of foreign bonds and Treasury bills and, secondarily, a €1.0 billion
increase in residents’ holdings of foreign shares.
Finally, under “other” investment, a net outflow of
€6.8 billion reflects a €13.2 billion increase (outflow) in resident credit
institutions’ and institutional investors’ deposit and repo holdings abroad,
which was only partly offset by a €2.0 billion rise (inflow) in non-resident
credit institutions’ and institutional investors’ corresponding holdings in
Greece, as well as a €4.5 billion inflow for loans granted by non-residents to
both the public and the private sector.
At end-August 2009, Greece’s reserve assets stood at €3.3
billion. The €676 million increase in reserve assets in comparison with the
immediately preceding month (July 2009) is attributable only to the extent of €8
million to balance-of-payments transactions, while the remaining €668 million
reflect an equal rise in the Special Drawing Rights allocated to Greece on 28
August 2009. (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 2009 will be
released on 18 November 2009.