Balance of Payments: MARCH 2009
22/05/2009 - Press Releases
Current account balance
In March 2009, the current account deficit dropped by €855 million
year-on-year to €2,706 million, reflecting a considerable contraction of the
trade deficit, which was only partly offset by a decline in the surplus of the
services balance and a small increase in the deficit of the current transfers
balance. During the same period, there was no remarkable change in the income
account deficit.
The narrowing of the overall trade deficit by €1,093 million reflects a €514
million decrease in the trade deficit excluding oil and ships (as the import
bill fell considerably, while export receipts showed an increase, which, however,
was very small) and declines of €423 million and €156 million in the net oil
import bill and net payments for purchases of ships, respectively.
The surplus of the services balance shrank by €208 million, mainly owing to a
€152 million fall in net transport receipts.
The current transfers balance showed a deficit of €88 million, up by €27
million year-on-year. (It should be recalled that current transfers from the EU
mainly include receipts from the Guarantee Section of the European Agricultural
Guidance and Guarantee Fund (EAGGF) in the context of the Common Agricultural
Policy, as well as receipts from the European Social Fund, while current
transfers to the EU include Greece's contributions (payments) to the Community
Budget.)
In the first quarter of 2009, the current account deficit narrowed by
€2,095 million or 22.2% year-on-year and reached €7,331 million, reflecting a
considerable decrease in the trade deficit, while during the same period the
surpluses of the services balance and the current transfers balance contracted
and the income account deficit grew.
The €3,131 million fall in the overall trade deficit stems from decreases of
€1,866 million or 27.6% in the trade deficit excluding oil and ships, €1,131
million in the net oil import bill and €134 million in net payments for
purchases of ships. Regarding the trade deficit excluding oil and ships, the
import bill fell by €2,309 million or 23.1%, i.e. more than export receipts,
which declined by €443 million or 13.7%.
The surplus of the services balance shrank by €626 million, reflecting lower
net transport receipts - gross transport receipts (mainly from merchant shipping)
fell by 23.9% - and higher net payments for other services. Both travel spending
by non-residents in Greece and travel spending by residents abroad dropped (by
18.2% and 16.7%, respectively); as a result, net travel payments remained
virtually unchanged.
The income account deficit expanded by €286 million, as a result of higher
net interest, dividend and profit payments. This development is mainly
associated with a rise in, mainly, net interest payments on deposits and loans
and - to a much lesser extent - dividend and profit payments, while net interest
payments on Greek government bonds and Treasury bills showed a small decrease.
Finally, the surplus of the current transfers balance declined by €124
million, mainly reflecting a rise in general government payments to the EU.
Capital transfers balance
In March 2009, the capital transfers balance showed a surplus of €249
million, compared with €220 million in March 2008. (Capital transfers mainly
include receipts from the Structural Funds - except for the European Social Fund
- and the Cohesion Fund under the Community Support Framework.)
In January-March 2009, the capital transfers balance showed a surplus
of €480 million, down from €1,417 million in the corresponding period of 2008.
This mainly reflects a decline in EU capital transfers to general government.
Thus, the overall transfers balance (current transfers plus capital transfers)
recorded a surplus of €1,860 million, compared with €2,921 million in the same
period of 2008.
Combined current account and capital transfers balance
The combined current account and capital transfers balance (which reflects
the economy's external financing requirements) showed a deficit of €2,457
million in March 2009, compared with a deficit of €3,341 million in March 2008.
In the January-March 2009 period, this deficit reached €6,851 million, compared
with €8,010 million in the same period of 2008, i.e. it dropped by 14.5%.
Financial account balance
In March 2009, non-residents' direct investment in Greece showed a net
inflow of €191 million. The most important transaction in this category
concerned a €64 million inflow for the completion of the acquisition of Lamda
Development by HSBC Property Invest (Luxembourg). Residents' direct investment
abroad showed a net outflow of €60 million. The most important transaction in
this category concerned a €20 million outflow by EFG Eurobank for its
participation in the share capital increase of its subsidiary Bank Post S.A. in
Romania.
Under portfolio investment, a net inflow of €6.1 billion was recorded,
reflecting a €3.4 billion rise (inflow) in non-residents' purchases of Greek
government bonds and Treasury bills and a €2.3 billion decrease (inflow) in
residents' investment in foreign bonds and Treasury bills. Moreover, a €401
million decrease (inflow) was recorded in residents' investment in shares of
foreign companies.
Under "other" investment, a considerable net outflow of €3.3 billion was
recorded, which is mainly attributable to a €4.5 billion increase (outflow) in
resident credit institutions' and institutional investors' deposit and repo
holdings abroad and a €806 million outflow for the repayment of loans granted by
non-residents to the public and the private sector. These outflows were partly
offset by a €2.0 billion increase (inflow) in non-residents' deposit and repo
holdings in Greece.
In January-March 2009, direct investment showed a net inflow of €88
million. Specifically, net inflows of non-residents' funds for direct investment
in Greece came to €341 million, while net outflows of residents' funds for
direct investment abroad reached €253 million.
During the same period, a net inflow of €15.2 billion was recorded under
portfolio investment. Specifically, there was an inflow of non-residents' funds
for purchases of Greek government bonds and Treasury bills (of €9.4 billion).
Inflows were also recorded owing to a €6.3 billion decrease in residents' investment in foreign bonds and Treasury bills. These inflows were offset only
to a very small extent by a €379 million decrease (outflow) in non-residents'
investment in shares of Greek firms.
Finally, under "other" investment, a net outflow of €8.3 billion is mainly
attributable to a €8.8 billion increase (outflow) in resident credit
institutions' and institutional investors' deposit and repo holdings abroad and
a €1.6 billion outflow for the repayment of loans granted by non-residents to
the public and the private sector. These outflows were only partly offset by a
€2.0 billion increase (inflow) in non-residents' deposit and repo holdings in
Greece.
At end-March 2009, Greece's reserve assets stood at €2.5 billion. It should
be recalled that, since Greece joined the euro area in January 2001, reserve
assets, as defined by the European Central Bank, include only monetary gold, the
"reserve position" with the IMF, "Special Drawing Rights", and Bank of Greece
claims in foreign currency on residents of non-euro area countries. Conversely,
reserve assets do not include claims in euro on residents of non-euro area
countries, claims in foreign currency and in euro on residents of euro area
countries, and the Bank of Greece participation in the capital and the reserve
assets of the ECB.
Note: Balance of payments data for April 2009 will be released on 24
June 2009.