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Balance of payments: January 2010

19/03/2010 - Press Releases

Current account balance

In January 2010, the current account deficit grew by €327 million or 9.7% year-on-year and reached €3,701 million, after falling throughout 2009. This development in January 2010 is attributable to a widening of the trade deficit and the deficit of the current transfers balance, as well as a decline in the surplus of the services balance. By contrast, the income account deficit contracted.

The €173 million rise in the trade deficit stemmed exclusively from an increase of €250 million or 30.5% in the net oil import bill. By contrast, net payments for purchases of ships dropped by €49 million. Moreover, the trade deficit excluding oil and ships shrank by €28 million, as the relevant import bill fell by €210 million or 8%, i.e. in absolute terms more than the corresponding export receipts, which declined by €182 million or 19.1%.

The €72 million fall in the surplus of the services balance is mainly accounted for by a €86 million decline in transport (mainly shipping) receipts, while net payments for travel and other services did not show any remarkable change. The €46 million decrease in the income account deficit reflects lower net interest, dividend and profit payments. Finally, the current transfers balance, which is usually in surplus, recorded a deficit, as January is a month of relatively high contributions (payments) to the Community Budget. In January 2010, these contributions (payments) rose visibly in comparison with January 2009, while net transfers to the other sectors (excluding general government) fell; as a result, the deficit of the current transfers balance rose by €127 million. (It should be recalled that gross 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.)

Capital transfers balance

In January 2010, the capital transfers balance showed a surplus of €32 million, considerably down by €69 million year-on-year. (Capital transfers mainly include receipts from the Structural Funds – except for the European Social Fund – and the Cohesion Fund under the Community Support Framework.)

Combined current account and capital transfers balance

The combined current account and capital transfers balance showed a deficit of €3,669 million in January 2010, up by €364 million year-on-year.

Financial account balance

In January 2010, residents’ direct investment abroad recorded a net outflow of €46 million, without any remarkable transactions. Non-residents’ direct investment in Greece recorded a net inflow of €18 million, also without any remarkable transactions.

Under portfolio investment, a net inflow of €3.8 billion was recorded, mainly reflecting inflows of €5.4 billion as a result of a decrease in resident institutional investors’ holdings of foreign bonds and Treasury bills. This inflow was partly offset by a €0.8 billion outflow due to a decline in non-residents’ investment in Greek government bonds and Treasury bills. There was also an outflow owing to increases of €0.6 billion and €0.2 billion in residents’ investment in foreign shares and financial derivatives, respectively.

Under “other” investment, a net inflow of €0.4 billion was recorded, which is mainly attributable to a €3.3 billion rise (inflow) in non-residents’ deposit and repo holdings in Greece, which was largely offset by a €2.8 billion increase (outflow) in resident credit institutions’ and institutional investors’ deposit and repo holdings abroad. At the same time, there was a €0.1 billion outflow as a result of a decline in the outstanding external debt of the public and the private sector.

At end-January 2010, Greece’s reserve assets stood at €3.8 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 February 2010 will be released on 20 April 2010.

Balance of payments (EUR millions - provisional)

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