Balance of payments: NOVEMBER 2007
25/01/2008 - Press Releases
Current account balance
In November 2007, the current account deficit grew by €742 million
year-on-year, to reach €3,400 million. This month saw a widening of mainly the
trade deficit and, secondarily, the income account deficit. Moreover, the
surplus of the current transfers balance fell to a very low level. These
developments were only partly offset by a large increase in the surplus of the
The year-on-year increase of €709 million in the overall trade deficit is
attributable to increases of €324 million, €217 million and €168 million
in the trade deficit excluding oil and ships, net payments for purchases of
ships, and the net oil import bill, respectively.
The overall surplus of the services balance widened by €308 million, as a
result of increases in mainly net transport receipts (up €252 million) and,
secondarily, net travel receipts (up €66 million), while net payments for
other services grew by €10 million.
The €142 million rise in the income account deficit is mainly attributable
to higher net interest, dividend and profit payments.
Finally, the surplus of the current transfers balance shrank considerably
year-on-year and reached a very low level. Specifically, general government
payments to the EU were almost double the corresponding receipts. By contrast,
the receipts of the other sectors (emigrants ' remittances etc.) were double the
corresponding payments. (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, as well as receipts from the European Social Fund, while
current transfers to the EU include Greece ' s contributions (payments) to the
In January - November 2007, the current account deficit expanded by
€6,479 million over the same period of 2006 and reached €27,334 million,
reflecting the growth of, mainly, the trade deficit and, secondarily, the income
account deficit, as well as - to a smaller extent - a decrease in the current
transfers surplus. By contrast, the services surplus rose.
The €5,266 million rise in the overall trade deficit was mainly a result of
increases (of €3,265 million and €1,896 million) in the trade deficit
excluding oil and ships and in net payments for purchases of ships, respectively,
and, to a much smaller extent, of a €105 million rise in the net oil import
bill. With respect to the trade balance excluding oil and ships, export receipts
grew by €518 million or 4.9%, i.e. much less than the corresponding import
bill, which rose by €3,783 million or 11.9%.
The services surplus expanded by €1,237 million, mainly reflecting higher
net transport receipts. Net travel receipts remained almost unchanged year-on-year,
while net payments for other services grew. It should be noted that gross
transport receipts (mainly from merchant shipping) increased by 16.6%.
The income account deficit rose by €1,720 million, as a result of higher
net interest, dividend and profit payments. This development is associated with
a rise in non-residents' holdings of Greek public debt, as well as the increase
in interest rates.
Finally, underlying the €730 million decline in the current transfers
surplus were decreases (of €387 million and €343 million, respectively) in
general government net receipts from the EU and in net receipts of the other
sectors (i.e. excluding general government). It should be noted that EU current
transfers to general government dropped by €150 million, while payments to the
EU grew by €237 million.
Capital transfers balance
In November 2007, the capital transfers balance showed a surplus of
€460 million, compared with €452 million in November 2006. (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
In January-November 2007, the capital transfers balance showed a
surplus of €2,983 million, €396 million up year-on-year. This reflects a
rise in EU capital transfers to general government. Thus, the overall transfers
balance (current transfers plus capital transfers) recorded a surplus of €4,989
million, compared with €5,323 million in the corresponding period of 2006.
Combined current account and capital transfers balance (according to
the old method of presentation)
The combined current account and capital transfers balance (according to the
old method of presentation) showed a deficit of €2,940 million in November
2007, compared with a deficit of €2,206 million in the same month of 2006. In January-
November 2007, this deficit came to €24,351 million, compared with €18,268
million in the same period of 2006.
Financial account balance
In November 2007, residents ' direct investment abroad came to €88
million, but no important items were recorded. During the same month, non-residents'
investment in Greece came to €159 million. The most important items of non-residents
' investment concerned an inflow of €110 million for covering the share
capital increase of GENIKI BANK by SOCIETE GENERALE (France), as well as a €40
million inflow for covering the share capital increase of ING HELLENIC LIFE
INSURANCE by its parent company, ING CONTINENTAL (Netherlands). Under portfolio
investment, a net outflow of €2,342 million was recorded, reflecting on the
one hand residents ' purchases of foreign bonds and Treasury bills (worth €2,592)
and, on the other hand, non - residents ' sales of shares of Greek firms (worth
€739 million). These developments were partly offset by, mainly, non-residents
' purchases of Greek government bonds and Treasury bills and, secondarily,
residents ' sales of foreign shares (worth €907 million and €154 million,
respectively). ''Other'' investment recorded a large net inflow of €4,700
million, reflecting a considerable increase in non-resident credit institutions
' deposit and repo holdings in Greece, which was considerably larger than the
increase in domestic credit institutions ' deposit and repo holdings abroad.
In January-November 2007, direct investment showed a net outflow of
€2,389 million. Specifically, net inflows of non-residents ' funds for direct
investment in Greece came to €992 million, while net outflows of residents '
funds for direct investment abroad reached €3,381 million. During the same
period, a net inflow of €13,395 million was recorded under portfolio
investment, as the inflow of non-residents' funds for investment in Greece (mainly
in Greek government bonds and shares of Greek firms, of €23.9 billion and €7.7
billion, respectively) was considerably larger than the outflow of residents '
funds, for investment mainly in foreign bonds and Treasury bills (worth €14.2
billion and €3.1 billion, respectively). Finally, under ''other'' investment,
a net inflow of €13,136 million reflects the fact that the inflow of non-residents
' funds, mainly for investment in deposits and repos in Greece, was almost
double the outflow of residents ' funds, chiefly for investment in deposits and
At end-November 2007, Greece's reserve assets reached €2.35 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 December 2007 will be released on
19 February 2008.