Balance of payments: October 2014
22/12/2014 - Press Releases
Current account balance
In October 2014, the current account balance showed a deficit of €199 million, down by €118 million year-on-year. This development was the result of improvements, on the one hand, in the services balance, owing mainly to a rise in net transport and “other” services receipts, and, on the other hand, in the current transfers balance, due to an increase in net transfers from the EU, despite the deterioration in the trade balance.
The trade deficit grew by €209 million year-on-year, owing to the higher net import bill for oil and other goods excluding ships. By contrast, net payments for purchases of ships decreased considerably. The trade deficit excluding ships grew, despite a 12.0% rise in oil export receipts and a 9.4% rise in ‘’other’’ goods export receipts, since the corresponding import bill also increased at a faster pace (by 20.6% and 16.0%, respectively).
The surplus of the services balance widened by €199 million year-on-year, primarily on account of improvements in the transport (sea and air transport) and in the “other” services balances (mainly business services). Travel receipts increased by 4.6%, reflecting an 18.9% rise in non-residents’ arrivals, which was largely offset by a rise in travel spending by residents abroad.
In the January-October 2014 period, the current account balance showed a surplus of €3.6 billion, compared with €2.1 billion over the same period in 2013. In addition, the overall balance of goods and services recorded a surplus of €2.9 billion, compared with €1.2 billion in 2013. This development is attributable to the improved services balance. It should be noted that, over the January-October 2014 period, total exports of goods and services rose by 8.6% (compared with 3.1% over the same period in 2013). In more detail, receipts from exports of goods increased by 4.9%, while receipts from services rose by 11.4%.
The trade deficit grew by €908 million, mainly on account of higher net payments for purchases of ships. The net oil import bill recorded just a slight increase, as did the trade deficit excluding oil and ships.
The €2.7 billion rise in the surplus of the services balance is due to higher net receipts from travel, transport and “other” services. Specifically, travel spending by non-residents in Greece grew by 10.6% year-on-year, reflecting a 21.9% rise in non-residents’ arrivals.
Moreover, in the January-October 2014 period, the income account deficit fell by €429 million, mainly as a result of lower net interest payments. Finally, the current transfers surplus contracted by €726 million year-on-year, mainly as a result of lower general government transfer receipts from the EU, and stood at €2.9 billion.
Capital transfers balance
In October 2014, the capital transfers balance showed a small deficit, as in October 2013. In the January-October 2014 period, the surplus of the capital transfers balance came to €1.8 billion, compared with €2.8 billion over the same period in 2013.
The overall transfers balance (current transfers plus capital transfers) recorded a surplus of €4.7 billion in the January-October 2014 period, compared with €6.4 billion over the corresponding period in 2013.
Combined current account and capital transfers balance
In the January-October 2014 period, the combined current account and capital transfers balance (corresponding to the economy’s external financing requirements) showed a surplus of €5.3 billion, against €4.9 billion in the same period in 2013.
Financial account balance
In October 2014, no remarkable transactions were recorded under residents’ direct investment abroad. Non-residents’ direct investment in Greece increased by €173 million, due to the participation of Madison Point Investment SARL, based in Luxembourg, in the capital increase of Credit Agricole Leasing Hellas SA.
Portfolio investment recorded a net outflow of €2.7 billion, chiefly on account, on the one hand, of a decrease (outflow of €1.7 billion) in non-residents’ investment in Greek government bonds and Treasury bills and, on the other hand, of an increase (by €1.0 billion) in residents’ investment in bonds and Treasury bills, as well as in financial derivatives and shares issued by non-residents.
Under “other” investment, a net inflow of €2.7 billion was recorded, mainly due to a net increase (of €3.5 billion) in non-residents’ deposit and repo holdings in Greece.
In the January-October 2014 period, non-residents’ direct investment in Greece showed a net inflow of €1.3 billion, while residents’ direct investment abroad showed a net outflow of €512 million.
Under portfolio investment, a net outflow of €3.5 billion was recorded, as the net outflow (€6.8 billion) for residents’ investment abroad was partly offset by a rise in liabilities (€3.3 billion). The latter was mainly the result of a rise in non-residents’ investment in shares of Greek firms, which was largely offset by a decrease in non-residents’ investment in Greek government bonds and Treasury bills.
Under “other” investment, the net outflow of €750 million reflects a decline in residents’ liabilities, which offset to a considerable extent a corresponding decline in their assets. The decline in the liabilities is mainly attributable to a drop in non-residents’ deposit and repo holdings in Greece (outflow of €10.1 billion), which was almost offset by a net increase in the outstanding debt of the public and the private sector to non-residents (inflow of €7.8 billion).
At end-October 2014, Greece’s reserve assets stood at €4.9 billion, compared with €4.5 billion at end-October 2013.
Note: Balance of payments data for November 2014 will be released on 20 January 2015.
Related link: Balance of payments: October 2014 - Table