Balance of payments: FEBRUARY 2007
20/04/2007 - Press Releases
Current account balance
In February 2007, the current account deficit grew by €554 million
year-on-year, to reach €3,109 million. This development reflects mainly the
shift of the current transfers balance to a deficit (from a surplus in the same
month of 2006) and, secondarily, increases in the trade deficit and the income
The year-on-year rise in the overall trade deficit is accounted for by a €203
million hike in the trade deficit excluding oil and ships, which more than
offset the declines in the net oil import bill and in net payments for purchases
of ships (of €81 million and €22 million respectively).
The overall surplus of the services balance showed a small increase of €16
million, which is almost exclusively attributable to a rise in the surplus of
the transport balance.
The widening of the income account deficit by €68 million mainly reflects
higher interest payments on deposits and loans and, secondarily, increased net
dividend payments, while net interest payments on Greek government bonds held by
non-residents dropped slightly.
Most importantly, however, the current transfers balance shifted to a deficit
of €289 million, from a surplus of €114 million in February 2006. This
development is mainly accounted for by a considerable rise (of €287 million) in
payments to the EU, reflecting a conjunctural increase in items (such as one-off
contributions and refunds) not included in regular payments to the Community
Budget. (It should be recalled that 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 - February 2007, the current account deficit widened by
€1,136 million over the same period of 2006 and reached €5,913 million,
reflecting mainly a rise in the trade deficit. Underlying the growth of the
current account deficit were also a decline in the current transfers surplus and
an increase in the income account deficit. By contrast, there was a small rise
in the surplus of the services balance.
The widening of the overall trade deficit by €652 million was mainly the
result of a €412 million increase in the trade deficit excluding oil and ships.
Specifically, receipts from goods exports (excluding oil and ships) grew by €96
million or 5.6%, while the corresponding import bill rose by €508 million or
9.6%. During the same period, net payments for purchases of ships surged by €287
million or 85%. Finally, the net oil import bill dropped by €47 million or 3.2%.
The services surplus expanded by €55 million, reflecting improvements in all
balances, notably the transport and travel balances. Specifically, it should be
pointed out that gross receipts for travel services grew by €21 million or 6.9%,
while gross receipts for transport services rose by €79 million or 3.5%.
The income account deficit increased by €169 million, as a result of higher
net interest, dividend and profit payments.
Finally, underlying the considerable decline in the current transfers surplus
by €370 million were higher gross payments to the EU by the general government
sector, observed only in February.
Capital transfers balance
In February 2007, the capital transfers balance showed a surplus of
€767 million, €694 million up 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.) Thus, despite the
deficit observed in the current transfers balance, as already mentioned, the
overall transfers balance showed a surplus which was considerably higher
than in February 2006.
In January-February 2007, the capital transfers balance showed a
surplus of €841 million, €733 million up year-on-year. This reflects exclusively
a rise in EU capital transfers to general government. Thus, the overall
transfers balance recorded a surplus of €986 million, which was by €363
million higher than in the same period of 2006.
Combined current account and capital transfers balance (according to
the old method of presentation)
The combined current account and capital transfers balance (according to the
old method of presentation) showed a deficit of €2,342 million in February
2007, €140 million down year-on-year. In January-February 2007, this
deficit came to €5,072 million, compared with €4,668 million during the same
period of 2006.
Financial account balance
In February 2007, a considerable net outflow of €1,829 million was
recorded under direct investment. This reflects a €1,750 million outflow for
residents' direct investment abroad, mainly owing to the completion of the
acquisition of FINANSBANK (Turkey) by the National Bank of Greece (outflow of
€1,722 million), as well as - to a much lesser extent - an outflow (of €79
million) recorded under non-residents' investment in Greece, partly owing to the
sale of PFIZER HELLAS S.A. by its parent company to JANSSEN-CIGA PHARMACEUTICALS
S.A. (outflow of €23 million). Under portfolio investment, a considerable net
inflow of €2,416 million was recorded, chiefly reflecting non - residents'
purchases of Greek government bonds and shares of Greek firms (of €3,725 million
and €1,260 million respectively). These developments were partly offset by
residents' purchases of foreign bonds, worth €2,401 million. ''Other''
investment recorded a net inflow of €1,628 million, mainly because the rise in
non-resident credit institutions' deposit and repo holdings in Greece was more
than double the increase in resident credit institutions' corresponding holdings
In January-February 2007, direct investment showed a net outflow of
€1,901 million (compared with a net inflow of €364 million in the same period of
2006). Specifically, the outflows of residents' funds for direct investment
abroad came to €1,844 million, while non-residents' direct investment in Greece
showed an outflow (of €57 million). During the same period, a net inflow of
€6,608 million was recorded under portfolio investment (compared with a net
outflow of €663 million in the same period of 2006), as the inflow of non -
residents' funds for investment in Greece (mainly in Greek government bonds and
shares of Greek firms, of €6.6 billion and €2.8 billion respectively) largely
exceeded outflows of residents' funds for investment in foreign bonds (worth
€3.0 billion). Finally, under ''other'' investment, a net outflow of just €284
million (compared with a substantial net inflow of €4.7 billion in the first two
months of 2006) mainly reflects the fact that the outflow of residents' funds to
deposits and repos abroad and - to a much smaller extent-loan repayments were
almost fully offset by non-residents' investment in deposits and repos in
At end - February 2007, Greece's reserve assets reached €2.1 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'' 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 March 2007 will be released on 22