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Balance of payments: July 2017

20/09/2017 - Press Releases

Current account

In July 2017, the current account showed a surplus of €1.6 billion, up by €213 million year-on-year. This improvement is attributable to a rise in the surplus of the services balance and a drop in the deficit of the primary and the secondary income accounts. On the contrary, the deficit of the goods balance increased.

A year-on-year increase of €232 million in the deficit of the balance of goods is mostly attributable to a rise in the deficit of the non-oil balance of goods, given that the relevant imports grew faster than the corresponding exports. The increase in the deficit of the oil balance was relatively lower. It should be noted that, during the same period, non-oil exports of goods rose by 1.8% and oil exports by 7.8% at constant prices.

A year-on-year rise of €249 million in the surplus of the services balance is due to an improvement in all its main components, most importantly in the travel balance, the surplus of which widened by €169 million, as in July 2017 non-residents' arrivals and the corresponding receipts increased by 10.2% and 5.3%, respectively. The surplus of the transport balance grew by €69 million, solely on account of higher net sea transport receipts.

The improvement in the primary income account is attributable, primarily, to lower net interest, dividend and profit payments and, secondarily, to higher net receipts under other primary income. The amelioration in the secondary income account is mainly due to the improved general government component.

In the January-July 2017 period, the current account improved, as the deficit declined by €210 million year-on-year and stood at €1.2 billion. This development reflects improvements in the services balance and in the primary and the secondary income accounts, which more than offset the increase in the deficit of the balance of goods. The overall balance of goods and services showed a deficit of €2.2 billion, up by €131 million year-on-year, as a rise in exports of goods and services was more than offset by an increase in imports.

In the January-July 2017 period, a year-on-year widening in the deficit of the balance of goods is primarily the result of an increase in the deficit of the oil balance. The deficit of the non-oil balance of goods also grew, given that imports increased faster than exports. It should be noted that non-oil exports of goods rose by 5.2% and oil exports by 8.2% at constant prices, while the increase in the corresponding imports was 7.4% and 10.4%.

An increase of €1.0 billion in the surplus of the services balance is the result of an improvement in all of its main components. Compared with the same period in 2016, non-residents' arrivals increased by 8% and the corresponding receipts by 6.4%. In addition, transport receipts rose by 18.1%.

The surplus of the primary income account grew by €292 million as a result of lower net interest, dividend and profit payments, while the deficit of the secondary income account declined on account of the improved non-government sectors component.

Capital account

In July 2017, the capital account showed a surplus of €28 million, compared with a small deficit in the same month of 2016, reflecting an improvement in the general government sector component, while in the January-July 2017 period it recorded a surplus of €372 million, compared with a surplus of €642 million in the same period of 2016.

Combined current and capital account

In July 2017, the combined current and capital account (corresponding to the economy's external financing requirements) registered a surplus of €1.6 billion, up by €244 million year-on-year, while in the January-July 2017 period it showed a deficit of €854 million, up by €61 million year-on-year.

Financial account

In July 2017, residents' net external assets increased by €121 million and residents' net external liabilities, which represent non-residents' direct investment in Greece, rose by €180 million, with no remarkable transactions.

Under portfolio investment, a net decrease in residents' external assets is chiefly attributable to a drop of €2.7 billion in residents' holdings of foreign bonds and Treasury bills. A net decline in residents' external liabilities is due to a decrease of €3.9 billion in non-residents' holdings of Greek government bonds and Treasury bills.

Under other investment, a net decrease in residents’ assets reflects mainly the statistical adjustment related to holdings of euro banknotes (a decline of €929 million). A net decline in liabilities reflects mainly a decrease of €8.3 billion in non-residents' deposit and repo holdings in Greece (the TARGET account included), as well as the statistical adjustment related to holdings of euro banknotes (a decline of €1.1 billion). These movements were largely offset by an increase of €7.3 billion in the outstanding debt of the public and the private sector to non-residents (including a new European Stability Mechanism – ESM - loan of €7.7 billion to the Greek State).

In the January-July 2017 period, under direct investment, residents' external assets rose by €639 million and the corresponding liabilities by €2.3 billion.

Under portfolio investment, a net decrease in residents' external assets reflects mainly a drop of €3.4 billion in residents' holdings of foreign bonds and Treasury bills, while a net decline in liabilities reflects chiefly a decrease of €4.6 billion in non-residents' holdings of Greek government bonds and Treasury bills.

Under other investment, a net decrease in residents' assets reflects mostly a drop of €2.6 billion in residents' (credit institutions' and institutional investors') deposit and repo holdings abroad and the statistical adjustment related to holdings of euro banknotes (a decline of €3.9 billion). A net decline in liabilities reflects chiefly a drop of €6.8 billion in non-residents' deposit and repo holdings in Greece (the TARGET account included), which, together with the statistical adjustment related to holdings of euro banknotes (a decline of €4.1 billion), more than offset a €4.3 billion increase in the outstanding debt of the public and the private sector to non-residents.

At end-July 2017, Greece’s reserve assets stood at €6.0 billion, compared with €6.9 billion at end-July 2016.

Note: Balance of payments data for August 2017 will be released on 23 October 2017.

Related link: Balance of payments: July 2017 - Table


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