Balance of payments: September 2013

19/11/2013 - Press Releases

Current account balance

September 2013

The current account balance showed a surplus of €964 million, up by €69 million year-on-year, as a result of a rise in the services surplus – more specifically, higher net travel receipts – which offset negative developments in the other balances.

The trade deficit excluding oil and ships increased, on account of a markedly higher import bill and flat export receipts. Furthermore, oil export receipts decreased, but less than the corresponding import bill; as a result, the oil trade deficit narrowed. Owing to these developments, the total trade deficit in September 2013 rose by €130 million.

The improvement in the travel balance was the most significant positive development of this month, as a result of higher tourist receipts (up by 17.3%, reflecting a 17.5% increase in non-residents’ arrivals). (It should be noted that travel spending by non-residents in Greece in September 2013 does not include cruise data that are not recorded in the Bank of Greece’s Border Survey and have not become available as yet).

January-September 2013

The current account balance showed a surplus of €2.6 billion, against a deficit of €2.8 billion in the same period of 2012. This development is attributable, primarily, to a significant decline in the trade deficit (down by €2.8 billion) and, secondarily, to increases in the current transfers and services surpluses (up by €2.1 billion and €1.3 billion, respectively). By contrast, the income account deficit increased.

In more detail, the contraction of the trade deficit is largely attributable to the considerably reduced import bill (by 6.3%) and, secondarily, to a 4.7% rise in export receipts. Apart from oil product exports, which account for the bulk of this increase, the contribution of the sectors of foods and beverages, minerals, and non-metallic mineral products was also significant. The decline in imports resulted mainly from lower oil imports.

An increase in the services surplus is mainly due to higher net travel receipts and the improved “other” services balance, which offset a contraction in net transport receipts. In more detail, travel spending in Greece by non-residents grew by 14.4% year-on-year (also reflecting a 15.2% rise in non-residents’ arrivals over the same period, according to the Bank of Greece’s border survey); at the same time, travel spending by residents abroad fell by 3.9%. (It should be noted that travel spending by non-residents in Greece in September 2013 does not include cruise data that are not recorded in the Bank of Greece’s Border Survey and have not become available as yet).

The income account deficit rose by €796 million year-on-year, mainly due to higher net interest, dividend and profit payments.

Finally, the current transfers balance showed a surplus of €3.7 billion, up by €2.1 billion year-on-year. This development is mainly due to higher general government net transfer receipts (mainly from the EU).

Capital transfers balance

In September 2013, the capital transfers balance showed a small deficit (of just €7.5 million), almost unchanged year-on-year. In the January-September 2013 period, as a result of higher net transfers to general government, the capital transfers balance recorded a surplus of €2.8 billion, up by €1.2 billion year-on-year.
Due to these developments, the overall transfers balance (current transfers plus capital transfers) showed a surplus of €6.4 billion in the January-September 2013 period, up by €3.3 billion year-on-year.

Combined current account and capital transfers balance

In September 2013, the combined current account and capital transfers balance (corresponding to the economy’s external financing requirements) showed a surplus of €956 million, compared with €887 million in September 2012. In the January-September 2013 period, this balance showed a surplus of €5.3 billion, against a deficit of €1.2 billion in the same period of 2012.

Financial account balance

In September 2013, non-residents’ direct investment in Greece showed a net outflow (decline) of €22 million (compared with a net outflow of €103 million in the same month of 2012), without any remarkable transactions. Residents’ direct investment abroad decreased by €38 million (inflow).

Under portfolio investment, a net inflow of €2.5 billion was recorded (compared with a net inflow of €41 million in September 2012), mainly as a result of a decline in residents’ holdings of foreign bonds and Treasury bills (inflow).

As regards “other” investment, a net outflow of €2.8 billion was recorded (compared with a net outflow of €708 million in the same month of 2012), which is mainly attributable to a €2.7 billion decrease (outflow) in non-residents’ deposit and repo holdings in Greece (including the TARGET account).

In the January-September 2013 period, non-residents’ direct investment in Greece showed a net inflow of €234 million, whereas residents’ direct investment abroad showed a net inflow (disinvestment) of €709 million.

Under portfolio investment, a net outflow of €7.5 billion was recorded (compared with a net outflow of €75.6 billion in the same period of 2012), mainly due to a drop in non-residents’ holdings of Greek government bonds and Treasury bills. This was partly offset by inflows due to non-residents’ purchases of shares of Greek firms and a decline in residents’ investment in foreign bonds, Treasury bills and shares.

Under “other” investment, a net inflow of €2.3 billion was recorded (compared with a net inflow of €77.3 billion in the same period of 2012). This is chiefly attributable to a €27.8 billion increase in the outstanding debt of the public and the private sector to non-residents, as well as to a €16.1 billion decline in resident institutional investors’ deposit and repo holdings abroad (inflows). These developments were partly offset by a €40.9 billion decrease in non-residents’ deposit and repo holdings in Greece (outflow).

At end-September 2013, Greece’s reserve assets stood at €4.6 billion, compared with €5.9 billion at end-September 2012.

Note: Balance of payments data for October 2013 will be released on 20 December 2013.