Balance of payments: February 2003
14/04/2003 - Press Releases
Current account balance
In February 2003, the current account balance recorded a €995
million deficit, slightly higher (by €42 million) than in February 2002. This increase
resulted from the widening of the income account deficit and the narrowing of the
transfers surplus. These developments were largely offset by a decrease in the trade
deficit and a small rise in the services surplus.
Specifically, the narrowing of the trade deficit was mainly accounted
for by the increase in non-oil export receipts, which more than offset the growth of the
non-oil import bill, and by the decline in the net oil import bill. Besides, the small
rise in the services surplus stemmed from the increase in net receipts from transport
services, while net receipts from travel services decreased and net payments for other
services showed a small increase. The income account deficit grew because of the rise in
net payments for interest, dividends and profits. Finally, the narrowing of the transfers
surplus reflects the fall in net receipts of general government (mainly net receipts from
the EU).
In January-February 2003 the current account deficit rose by
€369 million over the same period in 2002 and reached €2,279 million. This mainly
reflects the narrowing of the transfers surplus and the widening of the income account
deficit. During the same period, no significant change was observed in the trade and
services balances.
The non-oil trade deficit declined by €103 million in
January-February 2003 as a result of a €26 million rise in export receipts and a fall
(of €77 million) in the import bill. At the same time, the net oil import bill grew by
€121 million. Over the same period, the services surplus increased, as the drop in net
receipts from travel services was more than offset by the rise in net receipts from
transport services. The income account deficit grew by €146 million, mainly owing to an
increase in net payments for interest, dividends and profits, as well as to a decline in
net receipts from fees and wages. Finally, underlying the narrowing (by €226 million) of
the transfers balance were mainly a reduction in transfers from the EU and, to a lesser
extent, an increase in payments by general government. By contrast, net transfers to the
other sectors grew.
Financial account balance
In February 2003, both residents' direct investment abroad and
non-residents’ investment in Greece were low. Under portfolio investment, a net inflow
of €878 million was recorded, mainly reflecting non-residents' investment in Greek
bonds, and was partly offset by an outflow for purchases of foreign bonds by residents.
Specifically, it should be stressed that the largest part of residents’ investment in
bonds issued by non-residents is accounted for by the restructuring of the Bank of
Greece’s securities portfolio in favour of bonds issued by euro area Member States,
which corresponds to an equal decrease in reserve assets, as defined by the ECB. Finally,
as regards "other investment", a small net outflow of €1,198 million was
observed, connected mainly to an outflow for repayment of general government loans, as
well as to an increase in deposits and repo holdings abroad by residents. These
developments were partly offset by the growth of deposits and repo holdings by
non-residents.
In January-February 2003, a net outflow of €285 million was
observed under direct investment, mainly associated with residents’ investment abroad in
January. During the same period, a considerable net inflow of €2,069 million was
recorded under portfolio investment. This development is connected to a sizeable inflow of
foreign investors’ funds, for the purchase of, mainly, Greek bonds and, secondarily,
equities. It should be pointed out that there was a notable outflow of funds for the
purchase of bonds by Greek investors. Finally, under ‘‘other investment’’, a net
outflow of €1,575 million was recorded. This is associated with the considerable
increase in deposits and repo holdings abroad by residents and with substantial general
government loan repayments. These developments were partly offset by a sizeable inflow
stemming from the growth of deposits and repo holdings by non-residents.
At end-February 2003, Greece’s reserve assets came to €7.2 billion.
(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" at the IMF, "Special Drawing Rights", and Bank of
Greece's 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 payment data for March 2003 will be released on
20 May 2003.