Balance of Payments: August 2015
21/10/2015 - Press Releases
Balance of Payments: August 2015 (1)
In August 2015, the current account showed a surplus of €2.1 billion, up by 232 million year-on-year. This development is attributable to a decline in the deficits of the balance of goods and the primary income account, which offset the fall observed in the surplus of the services balance.
The deficit of the balance of goods shrank by €268 million year-on-year, mainly because of a drop in imports, which was largely due to the imposition of capital controls. Exports also declined, albeit to a lesser extent. It should be noted that in August the value of goods exports excluding oil and ships fell by a mere 2.8%.
The surplus of the services balance declined by €142 million, as a result of lower net transport (mainly sea transport) and other services receipts. By contrast, the travel balance improved. The surplus of the travel balance rose by €212 million, as a result of an increase in non-residents’ arrivals in August by 2.8% and a 7.3% increase in receipts.
As a result of the above-mentioned developments, imports of goods and services registered a decline of 17.4%, which is fairly higher than the drop in the corresponding exports (9.8%), leading to an increase of €125 million in the surplus of the balance of goods and services.
In August 2015, the primary income account showed a deficit which was lower by €109 million year-on-year, while the secondary income account did not change considerably.
In the January-August 2015 period, the current account improved by €1.5 billion and showed a surplus of €936 million, against a deficit of €557 million in the corresponding period of 2014. This reflects the improved balance of goods and services, which registered a surplus of €1.3 billion, against a deficit of €1.5 billion in the same period of 2014, mainly due to the reduced import bill. Overall, receipts from exports of goods and services fell by 4.7% in the January-August 2015 period, but the corresponding import bill decreased at a faster pace of 11.2%. In the same period, the primary and secondary income accounts deteriorated.
The deficit of the balance of goods declined by €3 billion, due to an improvement in all subaccounts. More specifically, receipts from exports of goods excluding oil and ships rose by 7.7%, while the corresponding import bill did not show any remarkable change.
The surplus of the services balance shrank, as net transport and other services receipts registered a decline, which was partly offset by a rise in net travel receipts. In the January-August 2015 period, total non-residents’ arrivals rose by 10.6% year-on-year and the corresponding receipts grew by 7.1%.
In August 2015, the capital account did not show any remarkable change, while in the January-August 2015 period the capital account showed a surplus of €614 million, down by €1.2 billion year-on-year.
Combined current and capital account
In August 2015, the combined current and capital account (corresponding to the economy’s external financing requirements) showed a surplus of €2.1 billion, up by €244 million year-on-year. In the January-August 2015 period, a surplus of €1.6 billion was recorded, up by €261 million year-on-year.
In August 2015, no remarkable transactions were recorded under direct investment.
Under portfolio investment, a net decrease of €228 million in residents’ external assets reflects mainly a decline of €169 million in residents’ holdings of foreign bonds and Treasury bills. A €2.9 billion drop in residents’ net external liabilities reflects exclusively a net decline in non-residents’ holdings of Greek bonds and Treasury bills.
Under other investment, a net decrease in residents' external assets is mainly attributable to a decrease of €317 million in residents’ deposit and repo holdings abroad and to the statistical adjustment of €362 million related to the issuance of banknotes. On the liabilities side, a €5.8 billion increase in the outstanding debt of the public and the private sector to non-residents (2) was largely offset by a net decrease of €5.6 billion in non-residents’ deposit and repo holdings in Greece (the TARGET account included) and a net increase of €112 million, owing to the statistical adjustment related to the issuance of banknotes. These developments resulted to a net increase of €343 million in liabilities.
In the January-August 2015 period, residents’ net assets from direct investment abroad rose by €265 million, while the corresponding liabilities that represent non-residents’ direct investment in Greece dropped by €175 million.
Under portfolio investment, a net decrease of €3.2 billion in residents’ external assets was mainly due to a drop of €10.4 billion in residents’ holdings of foreign bonds and Treasury bills, which was partly offset by a rise of €7.0 billion in residents’ investment in shares of foreign firms. Moreover, residents’ net external liabilities fell by €9.9 billion, mainly on account of a decline in non-residents’ investment in Greek government bonds and Treasury bills and in shares of Greek firms.
Lastly, under other investment, a net increase in residents’ external assets and liabilities mainly reflects the statistical adjustment associated with the issuance of banknotes (3). In addition, regarding assets, in January-August 2015, residents’ deposit and repo holdings abroad registered a net increase of €3.5 billion. On the liabilities side, a net increase of €12.3 billion in non-residents’ deposit and repo holdings in Greece (including the TARGET account) was partly offset by a decrease in residents’ outstanding debt.
At end-August 2015, Greece’s reserve assets stood at €5.0 billion, almost unchanged from end-August 2014.
Note: Balance of payment statistics for September 2015 will be released on 20 November 2015.
Related link: Balance of Payments: August 2015 - Table
(1) Starting from data referring to July 2015, the Bank of Greece uses ELSTAT’s trade statistics instead of the settlements data used until June 2015 inclusive. For more information on the transition to the new methodology, see the relevant Press Release published by the Bank of Greece on 21 September 2015. Moreover, as from reference month January 2015, the presentation of the balance of payments is in accordance with the IMF’s Balance of Payments Manual 6th edition (BPM6).
(2) Including a new loan of €13 billion to the Greek government by the ESM and the repayment of a €7.2 billion bridge loan under a bridge financing agreement.
(3) In the January-August 2015 period, both assets and liabilities registered an increase on account of the statistical adjustment related to the issuance of banknotes, which came to €17.4 billion and €17.0 billion respectively.