Balance of payments: FEBRUARY 2005
20/04/2005 - Press Releases
Current account balance
In February 2005, the current account deficit showed a
deficit of €402 million, compared with a surplus of €102 million in the same
month of 2004. This development is accounted for by a considerable widening of
the trade and the income account deficits and a decrease in the transfers
surplus, which were not offset by the increase in the services surplus.
Underlying the widening of the trade deficit was mainly a
rise in the non-oil trade deficit, while at the same time the net oil import
bill grew. The improvement in the services surplus is attributable to a rise in
net transport (mainly shipping) receipts, while net travel receipts remained
virtually unchanged and net payments for "other" services rose. The
income account deficit more than doubled, mainly as a result of the increase,
year-on-year, in interest payments on Greek Government bonds and loans. Finally,
the year-on-year decline in the transfers surplus mainly reflects a decrease in
net EU transfers to general government, while the net receipts of the other
sectors (emigrants' remittances etc.) also fell.
In the January-February 2005 period, the current
account deficit rose considerably (by €813 million) over the same period of
2004 and reached €2,009 million. This development reflects a substantial
increase in the trade deficit, a narrowing of the transfers surplus and a small
rise in the income account deficit. These developments were only partly offset
by the growth of the services surplus.
The trade deficit grew by €582 million over the same period
of 2004. Specifically, the non-oil import bill rose by €351 million (or 7.3%),
while non-oil export receipts were virtually unchanged. However, it should be
noted that this deterioration in the non-oil trade deficit is attributable to
net payments for the purchase of ocean-going vessels. Thus, the trade deficit
excluding ships and oil improved by €105 million in the period under review
(January-February 2005: €3,203 million, January-February 2004: €3,308
million).) Over the same period, the net oil import bill increased by €211
million.
By contrast, the services surplus grew by €154 million,
mainly owing to a €266 million rise in net transport receipts (mainly from
shipping). This increase more than offset the decline in net travel receipts and
the growth of net payments for ''other'' services. Over the same period, the
income account deficit widened by €61 million due to increased interest,
dividend and profit payments, as already mentioned.
Finally, a €324 million year-on-year decline in the
transfers surplus is mainly accounted for by a decrease in EU transfers to
general government and, to a lesser extent, a fall in the net receipts of the
"other" sectors.
Financial account balance
In February 2005, a €184 million outflow was
observed under residents' direct investment abroad. The most important
investments concern the acquisition of JUBANKA bank in Serbia by ALPHA BANK
(€152 million), as well as the participation of the National Bank of Greece in
the increase of the share capital of ROMANEASCA Bank in Romania (€32 million).
Moreover, a €30 million net inflow was observed under non-residents'
investment in Greece. Under portfolio investment, a net inflow of €947 million
was mainly accounted for by non-residents' investment in Greek government bonds
and shares of Greek firms. This inflow was largely offset by residents' outflows
for the purchase of bonds issued by non-residents. Finally, as regards
"other investment", a substantial inflow of non-residents' funds was
observed, mainly to deposits and repos, which was more than offset by an outflow
of residents', mainly credit institutions' and institutional investors', funds
to deposits and repo holdings abroad and, secondarily, by an outflow of funds
for the repayment of loans granted by non-residents.
In January-February 2005, non-residents' direct
investment in Greece reached €100 million, while residents' direct investment
abroad came to €208 million. Over the same period, a net inflow of €1,117
million was recorded under portfolio investment, as the outflow of residents'
funds for investment abroad (mainly purchases of bonds, of €3,985 million) was
more than offset by the inflow of non-residents' funds for investment in Greece
(mainly purchases of Greek government bonds and shares of Greek firms, of
€4,424 and €974 million respectively). Finally, a net inflow of €416
million under ''other'' investment is mainly associated with substantial inflows
of non-residents' funds to deposits and repos in Greece (of €11,283), which
were offset by outflows of residents' funds (of €10,091 million) to deposits
and repos abroad and outflows (of €748 million) for the repayment of loans
granted to residents by non-residents.
At end-February 2005, Greece's reserve assets came to
€1.8 billion. (It should be recalled that since the first months of 2003 the
Bank of Greece has started to diversify its portfolio, by reducing its non-euro
area currency holdings, which are included in reserve assets, and increasing its
assets which had higher yields and are mainly denominated in euro -
predominantly bonds issued by euro area Member States, which are not
included in reserve assets. It has been noted repeatedly 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 in 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 March 2005 will be
released on 24 May 2005.