Balance of payments: MARCH 2006
24/05/2006 - Press Releases
Current account balance
In March 2006, the current account deficit rose
considerably year-on-year to
Current account balance
In March 2006, the current account deficit rose
considerably year-on-year to € 3,281 million.
This development is attributable mainly to a substantial increase in the trade
deficit and, secondarily, to the widening of the income account deficit and the
narrowing of the services surplus. The current transfers surplus remained
virtually unchanged.
Underlying a sizeable rise (€ 1,370
million) in the overall trade deficit in March were hikes (of € 613
million, €555 million and €202
million respectively) in the trade deficit excluding oil and ships, the net oil
import bill and the deficit of the ships ' balance (sales minus purchases).
The overall surplus of the services balance declined by €82
million in comparison with March 2005, mainly as a result of a €52
million decrease in net transport receipts and a €90
million rise in net payments for '' other '' services. By contrast, net travel
receipts grew (by €60 million).
A €208 million rise in the
income account deficit was mainly accounted for by a €215
million increase in interest payments on Greek government bonds held by
non-residents.
The current transfers surplus remained virtually unchanged
year-on-year. Specifically, net current transfers from the EU were reduced by
€16 million, while net receipts from transfers to other sectors of the economy
grew by €25 million. 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 and receipts from the European Social
Fund, while current transfers to the EU include Greece ' s contributions to the
Community Budget.
In January-March 2006, the current account deficit
widened by €3,412 million over the same period of
2005 and reached €8,000 million, reflecting
mainly a rise in the trade deficit. The growth of the current account deficit is
also accounted for (albeit to a much lesser extent) by a narrowing of the
services surplus and the current transfers surplus and the growth of the income
account deficit.
Almost half of the €2,394
million rise in the overall trade deficit (including oil and ships) is
due to a €1,184 million increase in the net oil
import bill, while the widening of the deficit excluding oil and ships and of
the deficit of the ships ' balance contributed by €980
million and €230 million respectively. However,
it should be pointed out that receipts from goods exports (excluding oil and
ships) showed a remarkable increase (of €433
million or 18.8%), which, however, was more than offset by a rise (of €1,411
million or 19.2%) in the corresponding import bill.
The services surplus narrowed by €312
million, as a result of a drop in net transport receipts (because gross
transport receipts rose by €89 million, but gross
transport payments increased by €270 million at the same time) and a hike in
net payments for '' other '' services. Finally, net travel receipts (in absolute
terms) showed a small rise, because payments dropped faster than receipts.
The income account deficit grew by €403
million, as net interest, dividend and profit payments increased, mainly owing
to the growth of net interest payments, as a result of a continuing rise in non-residents'
holdings of old and new issues of Greek Government bonds.
Finally, a €304 million fall
in the current transfers surplus is exclusively attributable to a €418 million
drop in net (mainly EU) current transfers to general government, while net
current transfers to the other sectors (excluding general government) grew by €114
million.
Capital transfers balance
In March 2006, the capital transfers balance showed a
surplus of €629 million, €505 million higher than
in March 2005. (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-March 2006, the capital transfers balance
recorded a surplus of €738 million, €74
million down year-on-year. This reflects almost exclusively a decline in EU
capital transfers to general government.
Combined current account and capital transfers balance
(according to the old method of presentation)
The combined current account and capital transfers balances (according
to the old method of presentation) showed a deficit of €2,651
million in March 2006, compared with a deficit of €1,506
million in March 2005. In January-March 2006, this deficit reached €7,262
million, compared with €3,777 million in the same
period of 2005.
Financial account balance
In March 2006, a net inflow of €59
million was observed under direct investment. Residents ' investment abroad
showed a small outflow of €79 million, associated
with the completion of the acquisition of the bank EFG EUROBANK S.A. POLSKA (Poland)
by EUROBANK ERGASIAS S.A., worth €77 million.
Under non-residents ' direct investment in Greece, an inflow of €138
million was recorded. The most important investments under this category
concerned an inflow of €114 million for the
participation of the parent company SARA LEE in the capital increase of its
subsidiary SARA LEE HELLAS, as well as an inflow of €36
million for the increase of the participation of PANEUROPEAN OIL AND INDUSTRIAL
HOLDINGS S.A. (Luxembourg) in the capital of HELLENIC PETROLEUM S.A. Under
portfolio investment, a net inflow of €1,672
million was observed, reflecting a €3,093 million
rise in non-residents ' purchases of, principally, Greek government bonds and,
secondarily, shares of Greek firms, which, however, was partly offset by a €1,421
million increase in residents ' investment, chiefly in bonds and, secondarily,
in shares and Treasury bills issued by non-residents. "Other" investment showed
a net inflow of €1,684 million, mainly as a
result of the growth of non-residents ' deposit and repo holdings in Greece and
the decline of residents ' deposit and repo holdings abroad.
In January-March 2006, direct investment showed a net
inflow of €423 million (compared with a
net inflow of €45 million in the previous
year). This development is mainly accounted for by a net inflow of €566
million for non-residents ' direct investment in Greece. Under portfolio
investment, a net inflow of €1,009 million was
recorded, as the inflow of non-residents ' funds, mainly to Greek government
bonds, more than offset residents ' outflows for investment abroad (mainly
in bonds). Finally, under '' other '' investment, a net inflow of €6,337
million is attributable to non-residents ' inflows (of €9,519
million), primarily to deposits and repos.
At end-March 2006, Greece ' s reserve assets came to €2.2
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 April 2006 will be
released on 21 June 2006.