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Balance of payments: July 2018

20/09/2018 - Press Releases

Current account

In July 2018, the current account showed a surplus of €1.6 billion, with no significant change year-on-year. The balance of goods and services recorded a larger surplus year-on-year, since the significant increase in the services surplus was stronger that the rise in the deficit of the balance of goods. However, this improvement was largely offset by a deterioration in the primary income account.
The deficit of the balance of goods increased by €198 million to €1.7 billion, as imports rose more than exports in absolute terms. It should be noted that, at constant prices, total exports of goods increased by 6.9% (non-oil exports of goods rose faster, by 13.1%) and total imports by 7.7% (non-oil imports of goods rose by 12.7%).
The surplus of the services balance increased by €469 million, primarily as a result of an improvement in the travel balance and, secondarily, in the transport balance. Specifically, non-residents’ arrivals rose by 7.7% in July year-on-year and the corresponding receipts grew by 14.4%. An improvement was seen in the transport balance, mainly on account of an increase in net sea transport receipts. On the other hand, net receipts from other services declined.
Lastly, in July 2018, the primary income account worsened significantly (as a result of increased net dividend and interest payments), while the secondary income account remained almost unchanged.
In the January-July 2018 period, the current account showed a deficit of €2.2 billion, up by €524 million year-on-year. This development was due primarily to an increase in the deficit of the balance of goods and secondarily to a decrease in the surplus of the primary income account. By contrast, the services balance and the secondary income account improved, partly offsetting the above-mentioned deterioration.
The deficit of the balance of goods grew, chiefly owing to the higher net oil import bill, mainly as a result of higher oil prices. The non-oil balance also worsened, but to a smaller extent. As regards the latter, exports rose by 13.8% (12.7% at constant prices), outpacing the corresponding imports, which grew by 9.8% and 9.7% at current and constant prices, respectively. However, the rise in imports in absolute terms was stronger than the rise in exports, resulting in a higher deficit.
In the January-July 2018 period, the surplus of the services balance grew by €885 million year-on-year. Specifically, non-residents' arrivals and the corresponding receipts rose by 14.6% and 17.0%, respectively.
Lastly, the surplus of the primary income account declined considerably, mainly as a result of higher net interest, dividend and profit payments. By contrast, the deficit of the secondary income account turned into a surplus, due to an improvement in the general government component.

Capital account

In July 2018, the capital account worsened year-on-year, while in the January-July 2018 period, the capital account surplus decreased by €180 million year-on-year.

Combined current and capital account

In July 2018, the combined current and capital account (corresponding to the economy’s external financing requirements) showed a surplus of €1.6 billion, almost the same as in July 2017. In the January-July 2018 period, the combined current and capital account showed a deficit of €2.1 billion, up by €775 million year-on-year.

Financial account

In July 2018, residents' net external liabilities, which represent non-residents' direct investment in Greece, increased by €267 million; the most important transaction was the sale of 51% of the capital of EPA Thessaloniki-Thessalia S.A., owned by DEPA (Public Gas Company) S.A., to Eni Gas e Luce S.p.A. (EGL).
Under portfolio investment, a small net decrease in residents' external assets is mainly attributable to a decline of €128 million in residents' holdings of foreign bonds and Treasury bills. A net decrease in their external liabilities is mainly due to a decline of €1.2 billion in non-residents' holdings of Greek government bonds and Treasury bills.
Under other investment, a net increase in residents' external assets is chiefly attributable to a rise of €974 million in residents’ deposit and repo holdings abroad and to the statistical adjustment related to holdings of banknotes.(1) A net increase in liabilities reflects mainly a rise of €2.3 billion in non-residents' deposit and repo holdings in Greece (the TARGET account included).
In the January-July 2018 period, under direct investment, residents' net external assets rose by €436 million and residents' net external liabilities, which represent non-residents' direct investment in Greece, increased by €2.3 billion.
Under portfolio investment, a net decrease in residents' external assets is chiefly attributable to a decline of €1.7 billion in residents' holdings of foreign bonds and Treasury bills. A net increase in their liabilities is mainly due to a rise of €2.7 billion in non-residents' holdings of Greek government bonds and Treasury bills.
Under other investment, a net decrease in residents' external assets is attributable both to a decline of €3.2 billion in residents’ deposit and repo holdings abroad and to the statistical adjustment related to holdings of banknotes.(2) A net decline in liabilities reflects chiefly a drop of €11.9 billion in non-residents' deposit and repo holdings in Greece (the TARGET account included), which was partly offset by a €5.3 billion increase in the outstanding debt of the public and the private sector to non-residents.
At end-July 2018, Greece’s reserve assets stood at €6.3 billion, compared with €6.0 billion in July 2017.

Note: Balance of payments data for August 2018 will be released on 22 October 2018.

(1)In July 2018, assets registered an increase on account of the statistical adjustment related to holdings of euro banknotes, which came to €310 million, while the corresponding liabilities registered a decline of €985 million.
(2)In the January-July 2018 period, both assets and liabilities registered a decrease on account of the statistical adjustment related to holdings of euro banknotes, which came to €3.5 billion and €4.8 billion, respectively.

Related link: Balance of Payments: July 2018 - Table

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