Balance of Payments: September 2023
20/11/2023 - Press Releases
- In September 2023, the current account deficit decreased year-on-year, mainly due to an improvement in the balance of goods and, to a lesser extent, in the balance of services and the secondary income account, while the primary income account deteriorated.
- In January-September 2023, the current account deficit decreased year-on-year, owing to an improvement in the balance of goods, the balance of services and the secondary income account, which was offset to a degree by a worsening in the primary income account.
Current account
In September 2023, the current account deficit slightly more than halved year-on-year and stood at €404.3 million.
A decline in the deficit of the balance of goods is accounted for by a larger drop in imports than in exports. Exports declined by 10.3% at current prices (‑10.1% at constant prices) and imports fell by 16.3% at current prices (‑7.5% at constant prices). More specifically, non-oil exports of goods declined by 10.1% at current prices (‑12.2% at constant prices), whereas non-oil imports of goods dropped by 3.7% at current prices (‑3.3% at constant prices).
An increase in the surplus of the services balance is mainly due to an improvement in the travel balance and, to a lesser extent, the transport and other services balances. Non-residents’ arrivals rose by 12.7% and the relevant receipts by 14.6% year-on-year.
The primary income account registered a deficit, against a surplus in the corresponding month a year earlier, mainly on the back of significant net payments, against net receipts, for interest, dividend and profits. The deficit of the secondary income account decreased compared with September 2022, reflecting a fall in general government net payments, which was partly offset by an increase in the net payments of the other sectors of the economy excluding general government.
In January-September 2023, the current account deficit decreased by €4.6 billion year-on-year to stand at €7.3 billion.
A decline in the deficit of the balance of goods is accounted for by a larger drop in imports than in exports. Exports fell by 6.2% at current prices (‑2.2% at constant prices), whereas imports declined by 10.8% at current prices (‑3.8% at constant prices). Specifically, at current prices non-oil exports of goods rose marginally by 0.2%, while the corresponding imports decreased by 2.3% (‑4.4% and ‑4.0% at constant prices, respectively).
An increase in the services surplus is attributed to an improvement, primarily, in the travel balance and, secondarily, in the other services balance, which was partly offset by a deterioration in the transport balance. Non-residents’ arrivals grew by 17.3% and the relevant receipts increased by 15.2% year-on-year.
The primary income account deficit deteriorated year-on-year, due to an increase in net interest, dividend and profit payments, which was partly offset by a rise in net receipts from other primary income. The surplus of the secondary income account widened year-on-year, owing to a shift from net payments to net receipts in the general government sector and, to a lesser extent, an increase in net receipts in the other sectors of the economy excluding general government.
Capital account
In September 2023, the capital account surplus decreased relative to September 2022 and stood at €48.5 million, as a result of net payments, instead of net receipts, recorded in the other sectors of the economy excluding general government.
In January-September 2023, the capital account surplus narrowed year-on-year and stood at €2.0 billion, mainly owing to lower net receipts in the other sectors of the economy excluding general government.
Combined current and capital account
In September 2023, the deficit of the combined current and capital account (corresponding to the economy’s external financing requirements) fell and stood at €355.9 million.
In January-September 2023, the deficit of the combined current and capital account declined significantly year-on-year and amounted to €5.2 billion.
Financial account
In September 2023, under direct investment, residents’ external assets increased by €220.7 million and residents’ external liabilities rose by €361.8 million, without any remarkable transactions.
Under portfolio investment, an increase in residents’ external assets is almost exclusively attributable to a rise of €1.5 billion in residents’ holdings of foreign bonds and Treasury bills. A decrease in their liabilities is mostly due to a decline of €787.0 million in non-residents’ holdings of Greek bonds and Treasury bills.
Under other investment, residents’ external assets increased, as a result of a €650.6 million rise in loans extended to non-residents and a €591.0 million statistical adjustment related to the issuance of banknotes, which were partly offset by a €189.0 million decrease in residents’ deposit and repo holdings abroad. A rise in residents’ external liabilities reflects chiefly an increase of €2.1 billion in non-residents’ deposit and repo holdings in Greece (the TARGET account included) and, secondarily, a €591.0 million statistical adjustment associated with the issuance of banknotes, which were partly offset by a decline of €156.6 million in the outstanding debt to non-residents.
In January-September 2023, under direct investment, residents’ external assets increased by €840.6 million and residents’ external liabilities, which represent non-residents’ direct investment in Greece, rose by €3.9 billion.
Under portfolio investment, a rise in residents’ external assets is almost exclusively due to an increase of €7.0 billion in residents’ holdings of foreign bonds and Treasury bills. A hike in residents’ external liabilities is mainly attributable to a rise of €4.3 billion in non-residents’ holdings of Greek bonds and Treasury bills, which was partly offset by a €359.0 million drop in their holdings of Greek equities.
Under other investment, a drop in residents’ external assets is due to a decline of €5.0 billion in residents’ deposit and repo holdings abroad, which was partly offset by a €3.7 billion statistical adjustment associated with the issuance of banknotes, and, to a lesser extent, by a €476.2 million rise in loans extended to non-residents by domestic financial institutions. An increase in residents’ external liabilities is associated with a €3.7 billion statistical adjustment related to the issuance of banknotes, which was partly offset by a decline of €1.3 billion in the outstanding debt to non-residents and, to a lesser extent, by a drop of €387.0 million in non-residents’ deposit and repo holdings in Greece (the TARGET account included).
At end-September 2023, Greece’s reserve assets stood at €11.8 billion, compared with €11.1 billion at end-September 2022.
Note: Balance of payments data for October 2023 will be released on 21 December 2023.