Balance of payments: August 2014

21/10/2014 - Press Releases

Current account balance

In August 2014, the current account balance showed a surplus of €1.8 billion, up by €612 million year-on-year, mainly on account of the higher services surplus.

The trade deficit contracted by €62 million year-on-year, owing to the lower net import bill for oil and ships. By contrast, the trade deficit excluding oil and ships increased, since export receipts remained almost unchanged, while the corresponding import bill rose by 4.8%.

The surplus of the services balance grew by €425 million year-on-year, chiefly on account of the surplus of the travel services balance. In more detail, travel receipts increased by 10.3%, reflecting a 25.0% rise in non-residents’ arrivals. In addition, increases were also recorded in the surpluses of the transport and the “other” services balances.

In the January-August 2014 period, the current account balance showed a surplus of €2.1 billion, compared with €1.4 billion over the corresponding period of 2013. In the same period, the overall balance of goods and services recorded a surplus of €1.5 billion, compared with €371 million in 2013. This development was attributable to the improved balance of services. It should be noted that, overall, exports of goods and services rose by 7.2% year-on-year in the January-August 2014 period. More specifically, exports of goods increase by 2.1%, while receipts from exports of services rose by 11.2%.

The trade deficit grew by €922 million, on account of the higher net import bill for oil and ships, which more than offset the contraction in the trade deficit excluding oil and ships. This contraction is attributable to the rise in export receipts, given that the corresponding import bill also increased, but at a slower pace.

The €2.1 billion rise in the surplus of the services balance is due to the higher net receipts from travel, transport and “other” services. Specifically, as regards travel spending by non-residents in Greece, a year-on-year increase of 11.1% was recorded, reflecting a 22.1% rise in non-residents’ arrivals.

Moreover, in the January-August 2014 period, the income account deficit fell by €551 million, mainly as a result of lower net interest payments. Finally, the current transfers surplus contracted by €981 million year-on-year, mainly as a result of lower general government transfer receipts from the EU, and stood at €2.8 billion.

Capital transfers balance

In August 2014, the capital transfers balance did not show any notable change compared with August 2013. In the January-August 2014 period, the surplus of the capital transfers balance came to €1.9 billion, compared with €2.8 billion over the same period in 2013. The overall transfers balance (current transfers plus capital transfers) recorded a surplus of €4.6 billion in the January-August 2014 period, compared with €6.5 billion over the corresponding period in 2013.

Combined current account and capital transfers balance

In the January-August 2014 period, the combined current account and capital transfers balance (corresponding to the economy’s external financing requirements) showed a surplus of €4.0 billion, against €4.2 billion in the same period of 2013.

Financial account balance

In August 2014, no remarkable transactions were recorded under direct investment.

Portfolio investment recorded a net outflow of €4.9 billion, chiefly on account of a decrease in non-residents’ investment in Greek government bonds and Treasury bills, as well as of a net outflow in residents’ holdings of foreign bonds and Treasury bills.

Under “other” investment, a net inflow of €3.7 billion was recorded, primarily on account of a net inflow in non-residents’ deposit and repo holdings in Greece and, to a lesser extent, on account of a slight increase in the outstanding debt of the public and the private sector to non-residents, which were partly offset by a net outflow in residents’ deposit and repo holdings abroad.

In the January-August 2014 period, non-residents’ direct investment in Greece showed a net inflow of €1.1 billion, while residents’ direct investment abroad showed a net outflow of €249 million.

Under portfolio investment, a net outflow of €1.1 billion was recorded, on account of a rise in residents’ investment abroad (outflow of €5.4 billion), which was largely offset by an increase in non-residents’ investment in Greece (inflow of €4.3 billion, mainly for investment in shares of Greek firms).

Under “other” investment, a net outflow of €1.9 billion was recorded, mainly on account of a decline in non-residents’ deposit and repo holdings in Greece, which was largely offset by a net increase in the outstanding debt of the public and the private sector to non-residents and a decrease in residents’ deposit and repo holdings abroad.

At end-August 2014, Greece’s reserve assets stood at €5.0 billion, compared with €4.8 billion at end-August 2013.

Note: Balance of payments data for September 2014 will be released on 20 November 2014.