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Balance of Payments: March 2018

21/05/2018 - Press Releases

Current account

In March 2018, the current account showed a deficit of €956 million, down by €457 million year-on-year, as the deficit of the balance of goods declined and more than offset a decrease in the surplus of the services balance, resulting in an improvement in the overall balance of goods and services. A positive effect also came from the improvement in the primary income account, while the secondary income account deteriorated.

The drop in the deficit of the balance of goods is attributable to an improvement in the oil balance, as oil exports increased by 11.9% (3.1% at constant prices), while the corresponding imports fell by 21.2%. Moreover, the deficit of the non-oil balance of goods shrank, as the relevant exports rose by 11.5% (10.8% at constant prices), i.e. much faster than the growth rate of the corresponding imports (3.1% and 3.2% at current and constant prices, respectively).

A contraction in the services surplus is due to lower net receipts, mainly from other services and, secondarily, from transport services, while net travel receipts increased, since non-residents' arrivals and the corresponding receipts rose by 12.8% and 28.2%, respectively. The deterioration in the transport balance is attributable to a worsening in the sea transport balance by 5.8%.

In the first quarter of 2018, the current account showed a deficit of €2.8 billion, up by €53 million year-on-year. This is attributable to a decline in the services surplus (mainly) and the secondary income account surplus. By contrast, the goods balance and the primary income account improved.

The deficit of the balance of goods declined due to an improvement in the oil balance, as oil exports rose by 16.1% at current prices (11.2% at constant prices), while imports increased by only 3% (-12.1% at constant prices). As regards the non-oil balance of goods, the relevant exports rose by 14.4% (13.3% at constant prices), i.e. faster than the growth rate of the corresponding imports (8.7% and 8.6% at current and constant prices, respectively). Nevertheless, the rise in imports in absolute terms was stronger than the rise in exports, which resulted in a higher deficit.

The decline in the services surplus is mainly attributable to a deterioration in the other services balance. The travel balance did not change considerably, despite an increase in non-residents' arrivals and the corresponding receipts by 12.8% and 13.8%, respectively, due to a rise in related payments. The transport balance deteriorated slightly.

Lastly, the surpluses in the primary and secondary income accounts showed a small increase and decrease, respectively.

Capital account

In March 2018, the capital account improved compared with March 2017, while in the first quarter of 2018, the capital account surplus decreased by €48 million year-on-year.

Combined current and capital account

In March 2018, the combined current and capital account (corresponding to the economy’s external financing requirements) showed a deficit of €948 million, down by €482 million year-on-year. In the first quarter of 2018, the combined current and capital account showed a deficit of €2.7 billion, up by €101 million year-on-year.

Financial account

In March 2018, under direct investment, residents' net external assets increased by €39 million and residents' net external liabilities, which represent non-residents' direct investment in Greece, rose by €439 million. The most significant transaction concerned the transfer of 67% of the shares of Thessaloniki Port Authority S.A., held by the Hellenic Republic Asset Development Fund (HRADF), to South Europe Gateway Thessaloniki (SEGT) Limited (Cyprus).

Under portfolio investment, a net increase in residents' external assets is mainly attributable to an increase (of €132 million) in residents' holdings of foreign bonds and Treasury bills, which was partly offset by a decline in their holdings of foreign equities. A net decrease in their liabilities is mainly due to a drop of €811 million in non-residents' holdings of Greek government bonds and Treasury bills.

Under other investment, a net decrease in residents' external assets is mainly attributable to a fall of €762 million in residents’ deposit and repo holdings abroad and to the statistical adjustment related to holdings of banknotes (1). A net decline in liabilities reflects chiefly a drop of €5.3 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, more than offset a €5.6 billion increase in the outstanding debt of the public and the private sector to non-residents.

In the first quarter of 2018, under direct investment, residents' net external assets increased by €445 million and residents' net external liabilities, which represent non-residents' direct investment in Greece, rose by €845 million.

Under portfolio investment, a net decrease in residents' external assets is chiefly attributable to a decline of €1.9 billion in residents' holdings of foreign bonds and Treasury bills. A net increase in their liabilities is mainly due to a rise of €3.4 billion in non-residents' holdings of Greek government bonds and Treasury bills.

Under other investment, a net decrease in residents’ external assets mainly reflects the statistical adjustment related to holdings of euro banknotes (2). A net decline in liabilities reflects mainly a fall of €8.9 billion in non-residents' deposit and repo holdings in Greece (the TARGET account included).

At end-March 2018, Greece’s reserve assets stood at €6.6 billion, compared with €6.5 billion at end-March 2017.

Note: Balance of payments data for April 2018 will be released on 20 June 2018.

Related link: Balance of Payments: March 2018  - Table

(1) In March 2018, both assets and liabilities registered a decrease on account of the statistical adjustment related to holdings of euro banknotes, which came to €498 million and €477 million, respectively.

(2) In the January-March 2018 period, both assets and liabilities registered a decrease on account of the statistical adjustment related to holdings of euro banknotes, which came to €1.8 billion and €1.7 billion, respectively.


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