Balance of Payments: June 2023
21/08/2023 - Press Releases
- In June 2023, the current account deficit decreased year-on-year due to an improvement in the balance of goods, the balance of services and the secondary income account, while the primary income account deteriorated.
- In the first half of 2023, the current account deficit declined year-on year, chiefly owing to an improvement in the balance of goods and the secondary income account, and, to a lesser extent, in the balance of services, which was offset to a degree by a worsening in the primary income account.
Current account
In June 2023, the current account deficit fell by €204.0 million year-on-year to stand at €638.2 million.
A reduction in the deficit of the balance of goods is accounted for by a larger drop in imports than in exports in absolute terms. Exports dropped by 24.2% at current prices (-9.6% at constant prices) and imports fell by 18.5% at current prices (-5.6% at constant prices). More specifically, non-oil exports of goods decreased by 1.6% at current prices (-3.9% at constant prices), whereas non-oil imports of goods dropped by 2.9% (-3.3% at constant prices).
An increase in the surplus of the services balance is due to an improvement mainly in the travel balance and, to a lesser extent, in the other services balance, while the transport balance deteriorated. Non-residents’ arrivals rose by 17.9% and the relevant receipts increased by 17.2% compared with June 2022.
The primary income account deficit grew year-on-year, mainly owing to higher net interest, dividend and profit payments. The deficit of the secondary income account decreased compared with June 2022, reflecting a fall in general government net payments.
In the first half of 2023, the current account deficit contracted by €3.7 billion year-on-year, to stand at €7.9 billion.
The deficit of the balance of goods declined, despite a small drop in exports, due to a larger decline in imports. Exports fell by 0.7% at current prices (+2.5% at constant prices), whereas imports fell by 7.2% (-1.8% at constant prices). Specifically, at current prices non-oil exports of goods rose by 5.1%, while the corresponding imports decreased by 1.5% (‑1.0% and -4.0% at constant prices, respectively).
An increase in the services surplus is attributed to an improvement primarily in the travel balance and, secondarily, in the other services balance, which was partly offset by a deterioration in the transport balance. Non-residents’ arrivals grew by 26.0% and the relevant receipts increased by 23.9% year-on-year.
The primary income account registered a deficit, against a surplus in the first half of 2022, reflecting an increase in net interest, dividend and profit payments, which was only partly offset by an increase in net receipts of other primary income. The secondary income account recorded a surplus, against a deficit in the corresponding period of 2022, mainly owing to a shift from net payments to net receipts in the general government sector.
Capital account
In June 2023, the capital account registered a small deficit of €56.2 million, against a surplus in June 2022, mainly because the other sectors of the economy excluding general government recorded net payments, instead of net receipts, as well as due to lower general government net receipts.
In the first half of 2023, the capital account surplus increased year-on-year and amounted to €1.9 billion, mainly due to a shift from net payments to net receipts in the other sectors of the economy excluding general government and, to a lesser extent, an increase in general government net receipts.
Combined current and capital account
In June 2023, the deficit of the combined current and capital account (corresponding to the economy’s external financing requirements) increased to reach €694.4 million.
In the first half of 2023, the deficit of the combined current and capital account declined significantly year-on-year and stood at €6.0 billion.
Financial account
In June 2023, under direct investment, residents’ external assets fell by €12.3 million and residents’ external liabilities rose by €383.9 million, without any remarkable transactions.
Under portfolio investment, an increase in residents’ external assets is mainly due to a rise of €1.5 billion in residents’ holdings of foreign bonds and Treasury bills. An increase in external liabilities is attributable to a rise of €674.0 million in non-residents’ holdings of Greek bonds and Treasury bills, which was partly offset by a €183.0 million fall in their holdings of Greek equities.
Under other investment, a drop in residents’ external assets is mostly due to a decline of €519.0 million in residents’ deposit and repo holdings abroad and, to a lesser extent, a decrease of €45.5 million in loans extended to non-residents, which were partly offset by a €372.0 million statistical adjustment associated with the issuance of banknotes. An increase in residents’ external liabilities reflects mainly a rise of €973.0 million in non-residents’ deposit and repo holdings in Greece (the TARGET account included), as well as a €372.0 million statistical adjustment associated with the issuance of banknotes, which were partly offset by a decline of €331.5 million in the outstanding debt to non-residents.
In the first half of 2023, under direct investment, residents’ external assets increased by €691.1 million and residents' external liabilities, which represent non-residents’ direct investment in Greece, rose by €2.0 billion.
Under portfolio investment, a rise in residents’ external assets is almost exclusively due to an increase of €5.8 billion in residents’ holdings of foreign bonds and Treasury bills. An increase in their liabilities is mainly due to a rise of €3.1 billion in non-residents’ holdings of Greek bonds and Treasury bills.
Under other investment, a decline in residents’ external assets stems mainly from a €3.1 billion decrease in residents’ deposit and repo holdings abroad and, to a lesser extent, from a €214.6 million drop in loans extended to non-residents by domestic financial institutions, which were partly offset by a €1.7 billion statistical adjustment associated with the issuance of banknotes. An increase in residents’ external liabilities reflects a rise of €3.9 billion in non-residents’ deposit and repo holdings in Greece (the TARGET account included) and a €1.7 billion statistical adjustment associated with the issuance of banknotes, which were partly offset by a decline of €295.8 million in the outstanding debt to non-residents.
At end-June 2023, Greece’s reserve assets stood at €12.0 billion, compared with €11.0 billion at end-June 2022.
Note: Balance of payments data for July 2023 will be released on 20 September 2023.