Balance of Payments: February 2017

20/04/2017 - Press Releases

Current account

In February 2017, the current account showed a deficit of €937 million, up by €109 million year-on-year. This development is attributable to an increase in the deficit of the balance of goods, which more than offset a rise in the surplus of the services balance, and to a decrease in the surplus of the primary income account. By contrast, the secondary income account improved. The total value of exports of goods and services grew by 11.6%, but the corresponding imports increased more in absolute terms, resulting in a slight deterioration in the overall balance of goods and services.

The deficit of the balance of goods increased year-on-year, mainly as a result of a rise in the deficit of the oil balance, owing to higher international oil prices. By contrast, the non-oil balance of goods improved. However, it should be noted that non-oil exports of goods declined by 1.8% at constant prices and the corresponding imports by 1.2%.

The surplus of the services balance expanded by €158 million year-on-year, as a result of the improved travel and other services balance, while net transport receipts decreased slightly. More specifically, travel receipts fell by 3.1%, in spite of a 2.6% rise in arrivals. The improvement in the travel balance is due to the fact that the decline in spending by residents travelling abroad was larger than the decline in spending by non-residents travelling in Greece.

In February 2017, the primary income account showed a surplus of €261 million, down by €146 million year-on-year, mainly as a result of a decline in net receipts under other primary income, which includes taxes and subsidies on products and production. The secondary income account showed a surplus of €115 million, up by €69 million year-on-year, mainly due to the improved balance of the general government sector.

In the January-February 2017 period, the current account improved by €392 million year-on-year and stood at €1.2 billion. This improvement is attributable to increased surpluses in the services balance, the primary income and the secondary income accounts. By contrast, the deficit of the balance of goods rose. The overall balance of goods and services recorded a deficit of €2.4 billion, up by €259 million year-on-year, as a rise in the services surplus was more than offset by an increase in the goods deficit.

The deficit of the balance of goods increased in the above mentioned period compared with the January-February 2016 period, mainly as a result of a rise in the deficit of the oil balance. Increases were also recorded in the deficit of the balance of goods excluding oil. Specifically, exports of goods excluding oil grew by 2.5% at constant prices and the corresponding imports by 5.4%.

The surplus of the services balance expanded by €253 million compared with the January-February 2016 period, reflecting improvements in all of its main components. Travel receipts fell by 2.7% and non-residents’ arrivals fell by 2.8%.

In the January-February 2017 period, the primary and secondary income accounts improved year-on-year.

Capital account

In February 2017, the capital account showed a surplus of €212 million, down by €32 million year-on-year, due to a drop in net capital transfers from the EU to general government. In the January-February 2017 period, the capital account registered a surplus of €253 million, down by €379 million year-on-year.

Combined current and capital account

In February 2017, the combined current and capital account (corresponding to the economy's external financing requirements) showed a deficit of €725 million, €140 million higher than the deficit one year earlier. In the January-February 2017 period, it did not show any significant change compared with the same period in 2016.

Financial account

In February 2017, under direct investment, residents' external assets rose by €170 million; the most important transaction concerned the participation of Eurolife ERB Life Insurance S.A. in the capital increase of Grivalia Hospitality S.A. (Luxembourg). Residents' external liabilities, which represent non-residents' direct investment in Greece, increased by €79 million, without any major transactions.

Under portfolio investment, a considerable decrease in residents' external assets is chiefly attributable to a decline of €1.3 billion in residents' holdings of foreign bonds and Treasury bills. An increase in liabilities reflects mainly a rise of €57 million in non-residents' holdings of Greek government bonds and Treasury bills.

Under other investment, an increase in residents' assets reflects mainly a rise of €196 million in residents' (credit institutions' and institutional investors') deposit and repo holdings abroad. Under the same category, lower liabilities reflect mainly a decrease in the outstanding debt of the public and the private sector to non-residents (down by €2.2 billion, including the repayment of €2.0 billion on the loan of the Greek State to the European Stability Mechanism-ESM), which more than offset a rise in non-residents' deposit and repo holdings in Greece (up by €1.3 billion, the ΤARGET account included).

In the January-February 2017 period, under direct investment, residents' external assets rose by €283 million and the corresponding liabilities grew by €349 million.

Under portfolio investment, a decrease in residents' external assets is chiefly attributable to a decline of €965 million in residents' holdings of foreign bonds and Treasury bills. An increase in liabilities reflects mainly a rise of €267 million in non-residents' holdings of Greek government bonds and Treasury bills.

Under other investment, a drop in residents' assets reflects mainly a decrease owing to the statistical adjustment (€727 million) related to holdings of euro banknotes. Under the same category, lower liabilities reflect mainly a decline in the outstanding debt of the public and the private sector to non-residents (€2.1 billion), which, combined with the statistical adjustment (€673 million), more than offset the rise in non-residents' deposit and repo holdings in Greece (€909 million, the ΤARGET account included).

At end-February 2017, Greece’s reserve assets stood at €6.6 billion, compared with €6.4 billion at end-February 2016.

Note: Balance of payments data for March 2017 will be released on 22 May 2017.