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Balance of Payments – July 2019

20/09/2019 - Press Releases

Balance of Payments – July 2019

Current account

In July 2019, the current account showed a surplus of €1.3 billion, down by €34 million year-on-year. This development reflects an increase in the deficits of the balance of goods and of the primary and secondary income accounts, which was partly offset by a significant improvement in the services balance.
The deficit of the balance of goods grew by €184 million, as, at current prices, the rise in imports exceeded the rise in exports, in both cases of fuel and non-fuel goods. It should be noted that, at constant prices, exports and imports of goods increased by 8.5% and 5.7%, respectively.
A €281 million improvement in the surplus of the services balance is almost entirely accounted for by higher net travel receipts. The transport balance improved slightly, exclusively on account of higher net sea transport receipts, while the other services balance worsened. It should be noted that, year-on-year, non-residents’ arrivals and the corresponding receipts showed an increase of 2.4% and 11.1%, respectively.
The deficit of the primary income account increased mainly on account of higher interest, dividend and profit payments and, secondarily, due to lower receipts from other primary income, which includes taxes and subsidies on products and production. Lastly, the secondary income account registered a slight deterioration which is due to an increase in general government net payments.
In the January-July 2019 period, the current account deficit narrowed by €725 million year-on-year and stood at €2.7 billion. This amelioration reflects, primarily, a rise in the surplus of the services balance and, secondarily, an improvement in the primary and secondary income accounts, which offset a widening in the deficit of the balance of goods.
The deficit of the balance of goods increased in spite of a rise in exports, as imports grew more in absolute terms. It should be pointed out that both exports and imports continued their upward course compared with the same period in 2018, albeit at a slower pace. More specifically, over the first seven months of 2019, exports of goods rose by 2.2% at current prices (1.3% at constant prices), while imports of goods increased by 4.7% at current prices (2.7% at constant prices).
A rise in the services surplus is due to an improvement, primarily, in the travel balance and, secondarily, in the transport balance, while the deficit of the other services balance widened. Travel receipts rose by 13.6%, even though non-residents’ arrivals increased only marginally by 0.6% year-on-year. Transport receipts rose by 6.9%, mainly on account of higher sea transport receipts.

Capital account

In July 2019, the capital account registered a deficit, against a surplus in the same month a year earlier, while in the January-July 2019 period the capital account surplus increased.

Combined current and capital account

In July 2019, the combined current and capital account (corresponding to the economy’s external financing requirements) showed a surplus of €1.3 billion, down by €60 million year-on-year. In the January-July 2019 period, the combined current and capital account showed a deficit of €2.4 billion, down by €793 million year-on-year.

Financial account

In July 2019, under direct investment, residents’ net external assets rose by €170 million; the most important transaction concerned the participation of Motor Oil (Hellas) Corinth Refineries S.A. in the capital increase of Ireon Investments LTD (Cyprus). Residents’ net external liabilities, which represent non-residents’ direct investment in Greece, rose by €501 million; the most important transaction concerned the acquisition of Iaso S.A. by OCM Luxembourg Healthcare Greece S.a.r.l. (Luxembourg).
Under portfolio investment, a net decrease in residents’ external assets is due to a decline of €1.0 billion in their holdings of foreign bonds and Treasury bills. A net decrease in residents’ liabilities is mainly attributable to a decline of €746 million in non-residents’ holdings of Greek government bonds and Treasury bills.
Under other investment, a net decrease in residents’ external assets is due to a decline in residents’ deposit and repo holdings abroad (down by €469 million) and in loans extended to non-residents (down by €322 million). A net decrease in their liabilities reflects a decline of €973 million in the outstanding debt of the public and the private sector to non-residents, as well as a decrease of €831 million in non-residents’ deposit and repo holdings in Greece (the TARGET account included).
In the January-July 2019 period, under direct investment, residents’ net external assets rose by €412 million and residents’ net external liabilities, which represent non-residents’ direct investment in Greece, increased by €2.5 billion.
Under portfolio investment, a net increase in residents’ external assets is due to a rise of €2.8 billion in residents’ holdings of foreign bonds and Treasury bills. A net increase in their liabilities is accounted for by a rise of €4.4 billion in non-residents’ holdings of Greek government bonds and Treasury bills.
Under other investment, a net decrease in residents’ external assets mainly reflects a decline of €3.5 billion in residents’ deposit and repo holdings abroad. A net decrease in their liabilities chiefly reflects a decline of €3 billion in the outstanding debt of the public and the private sector to non-residents, as well as a decrease of €1.9 billion in non-residents’ deposit and repo holdings in Greece (the TARGET account included).
At end-July 2019, Greece's reserve assets stood at €7.0 billion compared with €6.3 billion at end-July 2018, mainly on account of valuation changes.

Note: Balance of payments data for August 2019 will be released on 21 October 2019.

Balance of Payments - July 2019 (20/9/2019) - Table

 

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