Current account balance
The current account deficit stood at 1,792 million euro in the May-June
2000 period, compared with 1,010 million euro in the corresponding period of 1999. As a
result, it grew by 2,179 million euro in the first half of 2000 compared with that in the
corresponding period of last year. Around 50 per cent of this increase stemmed from net
oil import bill, which more than tripled.
The trade deficit increased substantially relative to the first half of
1999, despite the strong growth of export receipts, associated with the pick-up in
economic activity in both the European Union and the countries of the Balkans and the
former USSR. The increase in fuel expenditure was mainly due to the rise in average crude
oil prices, which reached 26.85 US dollars per barrel in the first half of 2000, compared
with 13.38 dollars in the corresponding 1999 period, as well as to the strengthening of
the US dollar against the euro. Moreover, increased demand for non-oil imports concerned
mainly: a) machinery and computer equipment, b) electrical appliances and wired and mobile
telephone equipment and c) passenger cars. Car imports continued to remain at high levels
in the first half of 2000, chiefly supported by the expansion of consumer loans, while the
rise observed in imports of other categories of goods was directly associated with the
fact that investment activity rose much faster than GDP, while the growth of disposable
income accelerated.
The services surplus increased by 347 million euro in the first half of
2000, owing to the doubling of transportation receipts and the considerable rise in travel
receipts. Finally, the transfer account (whose surplus rose by 1,259 million euro over the
same period) improved significantly, mainly because of the rise in net transfers from the
EU.
Financial account balance
The most important developments in the financial account over the
May-June 2000 period concerned the growth of net inflows for direct and portfolio
investment (+244 million euro and +511 million euro, respectively). Direct investment net
inflows were mainly associated with non-residents' holdings with domestic firms of the
financial sector. In the same period, "other investment" (whose movements
chiefly concern deposits, by credit institutions in particular, as well as loans
contracted or paid off by general government) recorded a small net outflow, against an
inflow of roughly equal size in the May-June 1999 period.
Overall, in the first half of 2000, net capital inflows for direct
investment stood at a lower level than in 1999, because in the January-March 2000 period
domestic capital outflows for investment abroad overshot corresponding inflows. Portfolio
investment also fell short of corresponding net inflows in the first half of 1999 (3,563
million euro against 4,444 million euro). Lastly, "other investment"
demonstrated an outflow amounting to 1,874 million euro.
As a result of developments in both the current and the financial
account, the country's foreign exchange reserves (errors and omissions inclusive) dropped
to 15.7 billion US dollars (or 16.4 billion euro) at end-June 2000, from 18.9 billion US
dollars at end-1999. According to the latest data available, Greece's foreign exchange
reserves amounted to 15.4 billion US dollars at the end of August 2000.