Balance of payments: SEPTEMBER 2007
20/11/2007 - Press Releases
Current account balance
In September 2007, the current account deficit grew by
€487 million year-on-year, to reach €1,711 million. This month saw a widening
mainly of the trade deficit and, secondarily, of the income account deficit, as
well as a narrowing of the surplus of the current transfers balance. These
developments were only partly offset by an increase in the surplus of the
The year-on-year increase of €490 million in the overall
trade deficit is mainly attributable to a €449 million rise in the trade deficit
excluding oil and ships. At the same time, net payments for purchases of ships
grew by €90 million. By contrast, the net oil import bill dropped by €49
The overall surplus of the services balance widened by €142
million, exclusively as a result of a considerable increase (of €193 million) in
net transport receipts. By contrast, net travel receipts declined slightly (by
€11 million) and net payments for other services grew (by €40 million).
The €104 million rise in the income account deficit is mainly
attributable to higher net interest, dividend and profit payments.
Finally, the surplus of the current transfers balance shrank
by €35 million year-on-year, because both net EU transfers to general government
and net transfers to the other sectors decreased. (It should be recalled that
gross 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-September 2007, the current account deficit
expanded by €4,836 million over the same period of 2006 and reached €20,977
million, reflecting the growth mainly of the trade deficit and, secondarily, of
the income account deficit, as well as – to a smaller extent – a decrease in the
current transfers surplus. By contrast, the services surplus rose.
The €3,787 million rise in the overall trade deficit was a
result of increases (of €2,747 million and €1,288 million) in the trade deficit
excluding oil and ships and in net payments for purchases of ships respectively,
while the net oil import bill dropped by €248 million. With respect to the trade
balance excluding oil and ships, export receipts grew by €412 million or 4.9%,
while the corresponding import bill rose by €3,160 million or 12.4%.
The services surplus expanded by €755 million, reflecting a
rise mainly in net transport receipts. The increase in net travel receipts was
small, while net payments for other services grew. It should be noted that gross
transport receipts (mainly from merchant shipping) increased by 13.7% and gross
travel receipts by 1.1%.
The income account deficit rose by €1,450 million, as a
result of higher net interest, dividend and profit payments. This development is
associated with a rise in non-residents' holdings of
public debt, as well as with the increase in interest rates.
Finally, underlying the decline of €354 million in the
current transfers surplus were lower (by €367 million) net receipts of the other
sectors (i.e. excluding general government), while general government net
receipts from the EU grew by €13 million. It should be noted that EU current
transfers to general government rose by €287 million, while payments to the EU
grew by €274 million.
Capital transfers balance
In September 2007, the capital transfers balance
showed a small surplus of €8 million, compared with €60 million in September
2006. (Capital transfers from the EU mainly include receipts from the Structural
Funds – except for the European Social Fund – and the Cohesion Fund under the
Community Support Framework.)
In January-September 2007, the capital transfers
balance showed a surplus of €2,511 million, €446 million up year-on-year. This
reflects a rise in EU capital transfers to general government. Thus, the overall
transfers balance (current transfers plus capital transfers) recorded a surplus
of €4,443 million, compared with €4,351 million 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 €1,703 million
in September 2007, compared with a deficit of €1,164 million in the same
month of 2006. In January- September 2007, this deficit came to €18,466
million, compared with €14,076 million in the same period of 2006.
Financial account balance
In September 2007, residents'
direct investment abroad came to €115 million, of which €55 million concerned
the acquisition of INTERNATIONAL COMMERCE BANK (Ukraine) by PIRAEUS BANK. During
the same month, non-residents' investment in Greece
recorded an outflow of €125 million, which mainly concerned a decrease in
financial liabilities of Greek firms to their parent companies abroad.
Under portfolio investment, a net inflow of €646 million was
recorded, reflecting the fact that inflows of non-residents'
funds for purchases of Greek government bonds and Treasury bills (worth €3,229
million) and shares of Greek firms (worth €320 million) more than offset an
outflow of residents' funds for purchases of foreign
bonds and Treasury bills (worth €2,517 million) and investment in shares of
foreign firms and financial derivatives (of €50 million and €336 million
"Other" investment recorded a net inflow of €2,092 million,
mainly because of a rise in non-resident credit institutions'
deposit and repo holdings in Greece, which was more than double than the
corresponding increase in residents' investment in
deposits and repos abroad.
In January-September 2007, direct investment showed a
net outflow of €2,451 million. Specifically, net inflows of non-residents'
funds for direct investment in Greece came to €681 million, while net outflows
of residents' funds for direct investment abroad reached
€3,132 million. During the same period, a net inflow of €14 billion was recorded
under portfolio investment, as the inflow of non-residents'
funds for investment in Greece (mainly in Greek government bonds and Treasury
bills, of €20.5 billion, as well as shares of Greek firms, of €7.8 billion) was
considerably higher than the outflow of residents' funds
for investment mainly in foreign bonds and Treasury bills (worth €12.4 billion)
and, secondarily, in foreign shares and financial derivatives (worth €1.0
billion and €0.9 billion respectively). Finally, under "other"
investment, a net inflow of €7.8 billion mainly reflects the fact that the
inflow of non-residents' funds for investment in deposits
and repos in Greece was almost double the outflow of residents'
funds for investment in deposits and repos abroad.
At end-September 2007, Greece's
reserve assets reached €2.4 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 October 2007 will
be released on 19 December 2007.