Balance of Payments: October 2015
21/12/2015 - Press Releases
Balance of Payments: October 2015 (1)
In October 2015, the current account showed a surplus of €314 million, against a deficit of €456 million in the same month of 2014. This improvement is mainly attributable to a decline in the deficit of the balance of goods, which offset the narrowing observed in the surplus of the services balance, resulting in an improved balance of goods and services. Moreover, the primary and secondary income accounts showed an improvement.
The deficit of the balance of goods shrank by €721 million year-on-year, mainly as a result of the lower net oil import bill, owing to the fall in oil prices. Transactions concerning the purchases and sales of ships, to the extent that they are conducted outside the domestic banking system due to capital controls, were also significantly reduced. Overall, a decrease was observed in both exports and imports of goods, although imports declined at a faster pace than exports.
The surplus of the services balance fell by €295 million, primarily as a result of lower net transport (mainly sea transport) receipts. The surplus of the travel balance also declined by €45 million, as a result of lower receipts from travel services, while the number of non-residents' arrivals in October did not show any remarkable change year-on-year. Finally, the other services balance improved.
As a result of the above-mentioned developments, imports of goods and services declined by 25.3%, i.e. more strongly than the corresponding exports (19.6%), and the deficit of the balance of goods and services shrank by €426 million.
In the January-October 2015 period, the current account showed a surplus of €2.1 billion, against a deficit of €403 million in the corresponding period of 2014. This reflects the improved balance of goods and services, which registered a surplus of €1.9 billion, against a deficit of €1.4 billion in the same period of 2014, mainly due to the reduced import bill. Overall, receipts from exports of goods and services fell by 8%, but the corresponding import bill decreased at a faster pace of 14.2%. In the same period, the primary and secondary income accounts deteriorated.
The deficit of the balance of goods declined by €4.4 billion, due to an improvement in all subaccounts. More specifically, receipts from exports of goods excluding oil and ships rose by 5.6%, while the corresponding import bill did not show any remarkable change.
The surplus of the services balance shrank, as net transport receipts registered a decline, which was partly offset by a rise in net travel and other services receipts. In the January-October 2015 period, total non-residents’ arrivals increased by 7.9% year-on-year, while the corresponding receipts grew by 4.1%.
In October 2015, the capital account showed a surplus of €1.1 billion, due to a significant rise in net capital transfers from the EU to general government. In the January-October 2015 period, the capital account showed a surplus of €1.7 billion, down by €118 million year-on-year.
Combined current and capital account
In October 2015, the combined current and capital account (corresponding to the economy's external financing requirements) showed a surplus of €1.4 billion, against a deficit of €466 million in the same period of 2014. In the January-October 2015 period, a surplus of €3.8 billion was recorded, up by €2.4 billion year-on-year.
In October 2015, no remarkable transactions were recorded under direct investment.
Under portfolio investment, a net increase of €1.7 billion in residents' external assets reflects mainly a rise in residents' holdings of foreign bonds and Treasury bills (which largely reflects Bank of Greece holdings). At the same time, residents’ net external liabilities declined by €320 million.
Under other investment, a net decrease of €734 million in residents' external assets is mainly attributable (apart from a statistical adjustment of €300 million related to the issuance of banknotes) to a decline in residents' deposit and repo holdings abroad. On the other hand, a net decrease of €429 million in liabilities reflects mainly the statistical adjustment related to the issuance of banknotes, as well as a net decrease of €223 million in the outstanding debt of the public and the private sector to non-residents (including principal payments of €451 million by the Greek State to the IMF).
In the January-October 2015 period, residents' net assets from direct investment abroad rose by €303 million, while the corresponding liabilities, which represent non-residents' direct investment in Greece, dropped by €372 million.
Under portfolio investment, a net increase of €1.1 billion in residents' external assets is mainly due to a €7.0 billion rise in residents' investment in shares of foreign firms, which was partly offset by a decline of €6.1 billion in residents' holdings of foreign bonds and Treasury bills. Moreover, residents’ net external liabilities fell by €10.1 billion, mainly on account of a decline in non-residents’ investment in Greek government bonds and Treasury bills and in shares of Greek firms.
Under other investment, a net increase in residents’ external assets and liabilities largely reflects the statistical adjustment associated with the issuance of banknotes (2). In addition, regarding assets, in January-October 2015 residents' deposit and repo holdings abroad registered a net increase of €2.7 billion. On the liabilities side, a net increase of €15.9 billion in non-residents’ deposit and repo holdings in Greece (the TARGET account included), as well as a further almost equal increase owing to the statistical adjustment related to the issuance of banknotes, were partly offset by a decrease in residents’ outstanding debt.
At end-October 2015, Greece's reserve assets stood at €5.4 billion, compared with €4.9 billion at end-October 2014.
Note: Balance of payments data for November 2015 will be released on 20 January 2016.
(1) Starting from data referring to July 2015, the Bank of Greece uses ELSTAT’s trade statistics instead of the settlements data used until June 2015 inclusive. For more information on the transition to the new methodology, see the relevant Press Release published by the Bank of Greece on 21 September 2015. Moreover, as from reference month January 2015, the presentation of the balance of payments is in accordance with the IMF’s Balance of Payments Manual 6th edition (BPM6).
(2) In the January-October 2015 period, both assets and liabilities registered an increase on account of the statistical adjustment related to the issuance of banknotes, which came to €16.4 billion and €15.7 billion respectively.
Related link: Balance of Payments: October 2015 - Table