Balance of Payments: JUNE 2008
19/08/2008 - Press Releases
Current account balance
In June 2008, the current account deficit grew by €471
million year-on-year, to reach €2,958 million, as a result of the expansion of
the trade deficit. By contrast, the income account deficit shrank and the
surpluses of the services balance and the current transfers balance rose.
The year-on-year rise of €852 million in the overall trade
deficit is attributable mainly to an increase of €526 million in the trade
deficit excluding oil and ships and, secondarily, το a €329 million rise in the
net oil import bill, while net payments for purchases of ships remained almost
As a result of increases in net travel and transport receipts
(up €128 million and €121 million respectively), the surplus of the services
balance grew by €200 million. Net payments for other services rose by €50
The €170 million decline in the income account deficit is
attributable to a drop in net dividend and profit payments, which was only
partly offset by an increase in net interest payments.
The surplus of the current transfers balance rose slightly by
€12 million year-on-year, as the net receipts of the other sectors (excluding
general government) grew by €35 million, while net EU transfers to general
government dropped by €23 million. (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 Community Budget.)
In the first half of 2008, the current account deficit
rose by €2,378 million over the corresponding period of 2007 and reached €19,136
million. This development reflects increases mainly in the trade deficit and,
secondarily, in the income account deficit, which were only partly offset by a
rise in the surpluses of the current transfers balance and the services balance.
The €3,746 million rise in the overall trade deficit is
attributable to increases of €1,945 million, €1,517 million and €284 million in
the net oil import bill, the trade deficit excluding oil and ships, and net
payments for purchases of ships, respectively. Regarding in particular the trade
balance excluding oil and ships, export receipts grew by €590 million or 9.9%,
while the corresponding import bill rose by €2,108 million or 11.3%.
The surplus of the services balance expanded by €528 million,
largely reflecting higher net transport receipts (up €674 million). It should be
noted that gross transport receipts (mainly from merchant shipping) increased by
22.3%. Net travel receipts rose by €134 million year-on-year, as gross receipts
(i.e. travel spending in Greece by non-residents) grew by €278 million (or
8.3%), while gross payments (i.e. travel spending abroad by residents of Greece)
increased by €143 million (or 12.6%). Net payments for other services rose by
The income account deficit expanded by €584 million,
exclusively as a result of higher net interest, dividend and profit payments.
This development is largely associated with a rise in non-residents' holdings of
Greek public debt.
Finally, the large increase of €1,425 million in the surplus
of the current transfers balance is attributable mainly to a substantial rise in
EU transfers to general government and, secondarily, to a decline in general
government payments to the EU.
Capital transfers balance
In June 2008, the capital transfers balance showed a
surplus of €76 million, compared with €61 million in June 2007. (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 the January-June 2008 period, the capital transfers
balance showed a surplus of €2,184 million (down €153 million year-on-year).
This mainly reflects a rise in general government payments to the EU, while EU
capital transfers to general government dropped only by €20 million. The overall
transfers balance (current transfers plus capital transfers), however, recorded
a surplus of €4,567 million, up €1,271 million in comparison with the
corresponding period of 2007.
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 €2,882 million in June
2008, compared with a deficit of €2,426 million in the same month of 2007. In
the January-June 2008 period, this deficit came to €16,952 million, compared
with €14,421 million in the same period of 2007.
Financial account balance
In June 2008, residents' direct investment abroad came
to €133 million, while non-residents' direct investment in Greece showed a small
inflow of €12 million. Under portfolio investment, a net inflow of €1,900
million was recorded, attributable chiefly to non-residents' purchases of Greek
government bonds and Treasury bills (worth €1,090 million), as well as to
residents' sales of foreign bonds/Treasury bills and shares (worth €845 million
and €442 million respectively). These developments were partly offset by non-residents'
sales of shares of Greek firms (worth €563 million). "Other" investment recorded
a net inflow of €633 million, mainly reflecting a €733 million decline in Greek
credit institutions' deposit and repo holdings abroad.
In the January-June 2008 period, direct investment
showed a net inflow of €1,550 million. Specifically, net inflows of non-residents'
funds for direct investment in Greece came to €2,716 million, while net outflows
of residents' funds for direct investment abroad reached €1,167 million. During
the same period, a small net inflow of €316 million was recorded under portfolio
investment. Specifically, the inflows due to non-residents' purchases of Greek
government bonds and Treasury bills (of €9.7 billion) and to residents' sales of
foreign shares (of €1.1 billion) offset outflows due to residents' purchases of
foreign bonds and Treasury bills (worth €8.7 billion) and to non-residents'
sales of shares of Greek firms (worth €1.7 billion). Finally, under "other"
investment, a net inflow of €15.1 billion is attributable to the fact that the
inflows of non-residents' funds for investment in deposits and repos in Greece
were almost three times the increase in residents' corresponding deposits abroad.
At end-June 2008, Greece's reserve assets reached €2.4
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 July 2008 will be
released on 19 September 2008.