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Balance of Payments: APRIL 2001

02/07/2001 - Press Releases

Current account balance

The current account balance recorded a small surplus (€55 million) in April 2001 against a €237 million deficit in April 2000. This improvement is due to the favourable developments concerning the services and current transfers surpluses, while the income account deficit increased. Finally, the trade deficit stood at about April 2000 levels.

The restriction of the trade deficit to April 2000 levels reflects, on one hand, the reduction in net fuel imports and, on the other, the increase of the non-oil trade deficit by the same amount. As regards the services balance, the improvement stemmed from increases in net travel and transport receipts. Regarding the transfers surplus, its growth is due to the considerable increase in net EU transfers, compared with April 2000; these transfers stood at relatively low levels in the first three months of 2001. Finally, the increase in the income account deficit has come as a result of an increase in net payments for interest, dividends and profits.

In the January-April 2001 period, the current account deficit decreased by €102 million against the corresponding 2000 period and stood at €2,442 million. This reduction has come about thanks to the growth in the services surplus, given that, during the same period, the trade and incomes deficits increased, while the current transfers surplus decreased.

The increase in net fuel imports is the sole source of the €120 million increase in the trade deficit while the growth in non-oil export receipts more than offset the corresponding increase in the non-oil import bill. As a result, the non-oil trade deficit was reduced by €32 million. The fast growth of net travel and transport receipts leads to a considerable widening of the services surplus, which covers an increasingly larger share of the trade deficit. The largest part of the growth in the incomes deficit stemmed from the increase in net payments for interest, dividends and profits. Finally, the transfers balance recorded a surplus, smaller than that of the corresponding period of 2000, due to the reasons mentioned above.

Financial account balance

Direct investment recorded a small net outflow (€12 million), which reflects higher investments of residents abroad against investments of non-residents in Greece, during the January-April 2001 period. Portfolio investment exceeded €2 billion, mainly concerning residents' investment in bonds and equity. The "outflow" appearing in "other investment" has come about as a result of the gradual release, as from the beginning of 2001, of banks' foreign currency redeposits with the Bank of Greece, as well as a consequence of the change in the definition of foreign exchange reserves. More specifically, beginning 2001, foreign exchange reserves do not include: a) claims on non-euro area residents in euro, b) claims on euro area residents in foreign currency and euro and c) the contribution of the Bank of Greece to the ECB share capital and foreign reserve assets.

As a result of the developments referring to the current and the financial accounts, Greece's foreign exchange reserves stood at €7.2 billion ($6.4 billion) at end-April 2001. As mentioned above, these aggregates are not comparable with the ones of last year, due to their adjustment to the ECB definition. ( It must be borne in mind that the total amount which, according to the new definition, is no longer included in the country's foreign exchange reserves reached €4,891 million at end-April 2001).

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