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Balance of payments: SEPTEMBER 2002

15/11/2002 - Press Releases

Current account balance

In September 2002 the current account balance recorded a 565 million euro deficit, slightly less than the corresponding deficit of September 2001 (581 million euro). This small improvement resulted mainly from the widening of the services surplus and, to a lesser extent, the rise in the transfers surplus. By contrast, the trade deficit grew and the income account deficit rose slightly.

In particular, the higher non-oil deficit reflects an increase in imports combined with a decrease in exports in September. Net payments for fuel imports practically remained at September 2001 levels. The rise in the services surplus came from the apparent increase in net receipts, mainly from travel services. It should however be noted that, as explained below, data on travel receipts and payments in 2002 are not fully comparable with those for previous years. The rise in the transfers surplus reflects a small increase in net receipts of both general government (from the EU) and other sectors in September. The income account deficit increased slightly.

In the January-September 2002 period, the current account deficit rose by 406 million euro, compared with that of the corresponding 2001 period, and came to 5,372 million euro. This development reflects mainly the lower transfers surplus, but also the widening of the trade deficit, which is related to the increase in both the non-oil deficit and net imports of fuel. The income account deficit rose a little. These developments were only partly offset by the rise in the services surplus.

The non-oil trade deficit grew by 392 million euro in the January-September 2002 period, as a result of a considerable decrease (by 570 million euro) in export receipts. At the same time, however, the import bill also decreased (by 178 million euro). Net imports of fuel rose by 148 million euro. In the same period, the services surplus widened, as the increase in net travel receipts more than offset the decrease in net transport receipts. It should be recalled that, as from May 2002, travel receipts and payments are calculated on the basis of a sample survey ("border survey"); thus data are not fully comparable with those of previous periods. The income account deficit increased mainly because of the rise in net payments for interest, dividends and profits. This development reflects lower interest rates and dividend yields in 2002, which resulted in a drop in receipts and – less so – in payments. Lastly, the narrowing of the transfers surplus is attributable to the fall in EU transfers, the increase in general government payments and the decrease in other sectors' net receipts. It should be noted that, as from September 2002, general government receipts from and payments to the EU are recorded separately (and not on a "net" basis, as was the case in the past). Back data have been revised accordingly, so as to be comparable to new data.

Financial account balance

In September 2002, direct investment abroad by residents and in Greece by non-residents was very low, whereas there had been a substantial net inflow in September 2001. Under portfolio investment, there was a net inflow of 1,396 million euro, mainly reflecting inflows of non-residents' funds for the purchase of Greek bonds, as well as repatriation of residents' funds that had been invested abroad. "Other investment" showed net outflows of 405 million euro, because residents both reduced their liabilities and increased their assets abroad.

In the January - September 2002 period, net outflows of 425 million euro were recorded under direct investment, mainly attributable to residents' investment abroad. In the same period, a substantial net inflow (of 9,736 million euro) was recorded under portfolio investment; this is connected with the considerable inflow of foreign investors' funds, mainly for the purchase of Greek government bonds and, to a lesser extent, for the purchase of shares. These developments more than offset the outflow of Greek investors' funds for the purchase of foreign bonds and shares. The shift of both foreign and Greek investors to the bond market reflects the uncertainly prevailing in international capital markets. Under "other" investment, there was a net outflow of 1,305 million euro, because the increase of deposits and repo holdings abroad by residents and the net decrease in general government loans more than offset the increase of deposits in Greece by non-residents.

At end-September 2002, the country's reserve assets came to 8.9 billion euro. (It should be recalled that, since Greece joined the euro area in January 2001, reserve assets, as defined by the European Central Bank, only include 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: As from November 2002, the Bank of Greece has adopted the "Special Data Dissemination Standard" of the International Monetary Fund which, inter alia, requires the prompt publication of statistical data. On the basis of this "Standard", balance of payments data for October will be released on 16 December 2000.

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