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Balance of payments: JANUARY 2009

20/03/2009 - Press Releases

Current account balance

In January 2009, the current account balance showed a deficit of €3,368 million, down by €566 million year-on-year. This development reflects a contraction of the trade deficit. By contrast, the surplus of the services balance declined and the deficits of the income account and the current transfers balance grew.

The €972 million decrease in the trade deficit reflects mainly a €603 million drop in the trade deficit excluding oil and ships and, secondarily, a €361 million fall in the net oil bill, while net payments for purchases of ships remained unchanged. Underlying the decline in the trade deficit excluding oil and ships was the fact that the import bill fell by €807 million or 24%, i.e. more than the corresponding export receipts (which decreased by €204 million or 18%).

The €248 million reduction in the surplus of the services balance is mainly attributable to a narrowing of the surplus of the transport balance and, secondarily, a rise in net payments for other services. The widening of the income account deficit mainly reflects higher net interest, dividend and profit payments. Finally, the growth of the deficit of the current transfers balance is accounted for by lower net transfers to the "other" sectors (excluding general government), while net EU transfers to general government remained virtually unchanged. (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.)

Capital transfers balance

In January 2009, the capital transfers balance showed a surplus of €68.5 million, i.e. considerably lower year-on-year. (Capital transfers mainly include receipts from the Structural Funds - except for the European Social Fund - and the Cohesion Fund under the Community Support Framework.)

Combined current account and capital transfers balance

The combined current account and capital transfers balance showed a deficit of €3,300 million in January 2009, down by €326 million year-on-year.

Financial account balance

In January 2009, direct investment showed a net inflow of €94 million. In particular, under non-residents' investment in Greece, a net inflow of €109 million was recorded. The most important transactions concerned a €75 million inflow from the Austrian company "Hofer KG" for its participation in the capital increase of "Aldi Hellas Supermarket Holding Ltd." and a €30 million outflow (disinvestment) concerning the sale by "Wind PPC Holding" to "Wind Hellas" of the former's stake in "Tellas S.A." (this was the second out of six instalments - the first one had been paid in October 2008). Residents' investment abroad recorded a net outflow of €15 million, with no remarkable transactions.

During the same period, a net inflow of €2,141 million was observed under portfolio investment, mainly reflecting inflows of €2,028 million as resident institutional investors' holdings of foreign bonds and Treasury bills fell, as well as inflows of €523 million for non-residents' purchases of Greek government bonds and Treasury bills, which, however, were considerably lower than in January 2008 (€6,600 million). These developments were partly offset by a small outflow of €384 million for residents' purchases of foreign shares.

"Other" investment recorded a net inflow of €1,258 million, mainly because of a €2,079 million increase in non-residents' deposit and repo holdings in Greece, which exceeded by far an outflow of €500 million for repayment of general government loans.

At end-January 2009, Greece's reserve assets reached €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 February 2009 will be released on 22 April 2009.

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