Balance of payments: AUGUST 2001
07/11/2001 - Press Releases
In August 2001, the current account balance recorded a 25
million euro deficit, against a 64 million euro surplus in August 2000. This development
is related to the reduction in the services surplus and the increase in the income account
deficit, which more than offset the improvement in the trade balance and the transfers
balance with respect to August 2000.
The decrease in the trade deficit in August 2001 is the result of the
reduction in the non-oil trade deficit, whereas net imports of oil increased compared with
August 2000. The decrease in the services surplus reflects the fall in net travel and
transport receipts. Besides, the increase of the transfers surplus is due to receipts from
UMTS licenses, which are included in the "other sectors" item; the increase in
the income account deficit is due to the increase in net payments for interest, dividends
In the January - August 2001 period, the current account deficit
decreased by 225 million euro against the corresponding 2000 period and stood at 4,383
million euro. This development is due to the reduction in the non-oil trade deficit and
the increase in both the services and the transfers surpluses. The income account deficit,
however, almost doubled.
The decrease in the non-oil trade deficit in the January-August period
is exclusively due to the considerable increase in export receipts, which more than offset
the growth of the import bill. As a result, the trade deficit decreased by 385 million
euro. By contrast, net oil imports rose by 260 million euro. The increase in net travel
receipts led to a considerable rise of the services surplus, which covered a larger part
of the trade deficit than in the corresponding period of 2000. The widening of the income
account deficit stems mainly from the increase in net payments for interest, dividends and
profits. Finally, the transfers balance recorded a larger surplus, mainly due to the
above-mentioned receipts from UMTS licenses.
Financial account balance
In August 2001, portfolio investment recorded a considerable
capital inflow, which is due to non-residents' investment in government bonds (including
bonds convertible to equity). By contrast, "other investment" recorded a
considerable outflow, owing to the decrease in non-residents' deposits in Greece and the
parallel increase in residents' (mainly banks') deposits abroad.
In the January - August 2001 period, direct investment recorded
a net inflow (700 million euro), compared with a considerable outflow in the corresponding
2000 period. This development is attributable to the inflow of capital for the purchase of
a part of INTERAMERICAN's share capital by EUREKO in July 2001. The net inflow for
portfolio investment reached 8,120 million euro and was higher than in the corresponding
2000 period, due to the continuing inflow of capital for the purchase of Greek government
bonds and bonds convertible to equity (as mentioned above), despite the gradual decrease
in interest rate differentials between Greece and the other euro area countries. As
regards the "outflow" appearing under "other investment", this is due,
to a significant extent, to the gradual release, as from the beginning of 2001, of banks'
foreign currency redeposits with the Bank of Greece. It is also due to redemption of the
General Government's foreign debt, as well as to the statistical recording of the change
in foreign exchange reserves brought about by harmonisation with the ECB definition.
According to this definition, as of the beginning of 2001 foreign exchange reserves do not
include (i) claims on non-euro area residents in euro, (ii) claims on euro area residents
in foreign currency and euro and (iii) the contribution of the Bank of Greece to the ECB
share capital and foreign reserve assets.
As a result of the evolution of the current account and the financial
account, Greece's foreign exchange reserves (on the basis of the ECB definition) stood at
7.8 billion euro (or 7.1 billion US dollars) at end-August 2001.