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Balance of Payments: April 2017

20/06/2017 - Press Releases

Current account

In April 2017, the current account showed a deficit that had almost halved year-on-year, as a result of a decrease in the deficit of the balance of goods and services and of a rise in the surplus of the primary income account, which more than offset an increase in the deficit of the secondary income account.

A year-on-year drop of €196 million in the deficit of the balance of goods is attributable to a decrease mostly in the deficit of the oil balance and, to a lesser extent, of the non-oil balance of goods. Non-oil exports of goods at current prices remained virtually flat, while they declined by 2.6% at constant prices.

A €97 million rise in the surplus of the services balance is due to higher net – mainly sea – transport receipts, which offset a drop in net travel and other services receipts. The surplus of the travel balance narrowed, in spite of a 12% increase in non-residents' arrivals and an 11.3% rise in the corresponding receipts, owing to a larger increase in spending abroad by residents.

A year-on-year rise of €176 million in the surplus of the primary income account is mainly attributable to higher net interest, dividend and profit receipts, and a widening of €59 million in the deficit of the secondary income account is due to a deterioration in the balance of the general government sector.

In the January-April 2017 period, the current account improved, as the deficit declined by €251 million year-on-year, to stand at €3.0 billion. This development is attributable to a rise in the surpluses of the services balance and of the primary and the secondary income accounts, which more than offset an increase in the deficit of the balance of goods. The overall balance of goods and services showed a deficit that was by €301 million higher year-on-year, as a rise in exports was offset by an increase in imports.

Over the same period, a year-on-year widening in the deficit of the balance of goods is primarily a result of an increase in the deficit of the oil balance. The deficit of the non-oil balance of goods also grew, given that imports increased faster than exports. Specifically, non-oil exports of goods grew by 3.5% at constant prices and the corresponding imports by 4%.

An increase of €441 million in the surplus of the services balance is a result of an improvement in all of its main components. More specifically, compared with the January-April 2016 period, travel receipts rose by 2.4% and non-residents' arrivals by 3.2% and, in addition, transport receipts grew by 18.9%.

During the same period, the primary and secondary income accounts improved.

Capital account

In April 2017, the capital account did not show any considerable change, while in the January-April 2017 period a surplus of €233 million was recorded, compared with a surplus of €676 million in the same period of 2016.

Combined current and capital account

In April 2017, the combined current and capital account (corresponding to the economy's external financing requirements) showed a deficit of €464 million, down by €421 million year-on-year, while in the January-April 2017 period it recorded a deficit of €2.8 billion, up by €192 million year-on-year.

Financial account

In April 2017, no remarkable transactions were recorded under direct investment. Residents' external assets rose by €95 million and residents' external liabilities, which represent non-residents' direct investment in Greece, increased by €264 million.

Under portfolio investment, a net decrease in residents' external assets is chiefly attributable to a drop of €841 million in residents' holdings of foreign bonds and Treasury bills, while a net decline in liabilities mainly reflects a fall of €1.1 billion in non-residents' holdings of Greek government bonds and Treasury bills.

Under other investment, a net decrease in residents' assets reflects principally a drop of €673 million in residents' (credit institutions' and institutional investors') deposit and repo holdings abroad. A net decrease in liabilities is mostly attributable to a reduction of €312 million in the outstanding debt of the public and the private sector to non-residents and to the statistical adjustment (drop of €298 million) related to holdings of euro banknotes. These developments offset a rise in non-residents’ deposit and repo holdings in Greece (up by €556 million, the TARGET account included).

In the January-April 2017 period, under direct investment, residents' external assets rose by €908 million and the corresponding liabilities grew by €1.3 billion.

Under portfolio investment, a net increase in residents' external assets reflects mainly a rise in their holdings of financial derivatives, while a net decrease in liabilities reflects chiefly a decline of €1.2 billion in non-residents' holdings of Greek government bonds and Treasury bills.

Under other investment, a net decrease in residents' assets reflects mainly a drop of €1.9 billion in residents' (credit institutions' and institutional investors') deposit and repo holdings abroad and the statistical adjustment (drop of €1.5 billion) related to the issuance of euro banknotes. A net decline in liabilities reflects mostly a drop in the outstanding debt of the public and the private sector to non-residents (down by €2.8 billion), which, together with the statistical adjustment (down by €1.3 billion), more than offset a rise in non-residents' deposit and repo holdings in Greece (up by €4.0 billion, the TARGET account included).

At end-April 2017, Greece’s reserve assets stood at €6.5 billion, compared with €6.8 billion at end-April 2016.

Note: Balance of payments data for May 2017 will be released on 21 July 2017.

Related link: Balance of payments: April 2017 - Table

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