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Balance of Payments: August 2019

21/10/2019 - Press Releases

Current account

In August 2019, the current account showed a surplus of €1.9 billion, up by €519 million year-on-year. This development is attributable to an improvement primarily in the services balance and secondarily in the balance of goods, while it was partly offset by an increase in the deficits of the primary and secondary income accounts.  

The deficit of the balance of goods shrank by €68 million, despite a drop in exports, since the decline in imports was, in absolute terms, larger. The drop in both exports and imports reflects developments in the oil sector. By contrast, non-oil exports of goods grew by 3.8% at constant prices, while the corresponding imports did not show any remarkable change.

A €543 million increase in the services surplus is mainly accounted for by higher net travel receipts. The surplus of the transport balance declined slightly, while the other services balance registered a surplus, against a deficit in the previous year. It should be noted that travel receipts increased by 16.1% and non-residents’ arrivals rose by 11% year-on-year.

The deficit of the primary income account widened mainly on account of higher net interest, dividend and profit payments. Finally, the deficit of the secondary income account showed a slight increase, due to higher net payments of the other (excluding general government) sectors.

In the January-August 2019 period, the current account showed a deficit of €911 million, down by €995 million year-on-year. This development reflects a rise in the services surplus and 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 rose, as imports increased more than exports. It should be noted that both exports and imports have decelerated significantly year-on-year. Total exports of goods rose by 1.1% at current prices (1.0% at constant prices), while non-oil exports grew by 4.3% (4.6% at constant prices). Total imports of goods increased by 3.4% at current prices (1.6% at constant prices).

A rise in the services surplus is due to an improvement in both the travel balance and the transport balance, while the deficit of the other services balance narrowed. Travel receipts and non-residents’ arrivals increased by 13.6% and 3.6% year-on-year respectively. Transport (mainly sea transport) receipts rose by 6%.

The deficit of the primary income account declined mainly due to lower net interest, dividend and profit payments, while the surplus of the secondary income account registered a considerable rise, owing to an improvement in the balance of the general government sector.

Capital account

In August 2019, the capital account recorded a surplus close to zero, while in the January-August 2019 period, the surplus of the capital account declined year-on-year. 

Combined current and capital account

In August 2019, the combined current and capital account (corresponding to the economy’s external financing requirements) showed a surplus of €1.9 billion, up by €429 million year-on-year. In the January-August 2019 period, the combined current and capital account showed a deficit of €649 million, down by €973 million year-on-year.

Financial account

In August 2019, under direct investment, residents’ net external liabilities (stemming from non-residents’ direct investment in Greece) increased by €151 million, without any remarkable transactions.

Under portfolio investment, a net decrease in residents’ external assets is chiefly attributable to a decline of €1.2 billion in their holdings of foreign bonds and Treasury bills. A net decrease in their liabilities is almost entirely attributable to a drop of €119 million in non-residents’ holdings of Greek government bonds and Treasury bills.

Under other investment, a net increase in residents’ external assets is attributable to a rise of €1.4 billion in residents’ deposit and repo holdings abroad and the statistical adjustment related to holdings of euro banknotes (of €1.7 billion). A net increase in liabilities reflects mainly a rise of €374 million in non-residents’ deposit and repo holdings in Greece (the TARGET account included).

In the January-August 2019 period, under direct investment, residents’ net external assets increased by €184 million and their net external liabilities rose by €2.5 billion.

Under portfolio investment, a net increase in residents’ external assets is due to a rise of €1.5 billion in residents’ holdings of foreign bonds and Treasury bills. A net increase in their liabilities is accounted for by a rise of €4.3 billion in non-residents’ holdings of Greek government bonds and Treasury bills.

Under other investment, a net increase in residents’ external assets is chiefly attributable to the statistical adjustment related to holdings of euro banknotes (of €2.7 billion), which was partially offset by a decrease of €1.9 billion in residents’ deposit and repo holdings abroad. A net decrease in 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 €1.5 billion in non-residents’ deposit and repo holdings in Greece (the TARGET account included).

At end-August 2019, Greece’s reserve assets stood at €7.5 billion, compared with €6.1 billion at end-August 2018.

Note: Balance of payment data for September 2019 will be released on 20 November 2019.

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