Balance of payments: OCTOBER 2001
16/01/2002 - Press Releases
Current account balance
The current account deficit came to 813 million euro in October 2001,
slightly exceeding that of October 2000. This development is mainly related to the
increase in the trade deficit and the income account deficit, which together more than
offset the rise in the transfers surplus. The services surplus remained approximately at
the October 2000 level.
The increase in the trade deficit with respect to October 2000 is the
result of the rise in its non-oil component as well as in the net oil bill, while the
widening of the income account deficit is due to the increase in net interest payments. As
regards the transfers surplus, it has recorded an increase because of the growth in net
inflows from the EU. Finally, the reduction in net transport receipts, the limited rise in
net travel receipts and the increase in net receipts from "other services",
mainly communications, construction and other business activities, have kept the services
surplus at the October 2000 level.
In the January-October 2001 period, the current account deficit
decreased by 256 million euro, compared with that in the corresponding 2000 period, and
stood at 5,790 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. At the same
time, the income account deficit almost doubled.
The decrease in the non-oil trade deficit during this period is due to
the considerable increase in export receipts, which more than offset the rise of the
import bill. As a result, the non-oil trade deficit decreased by 409 million euro. By
contrast, net oil imports rose by 82 million euro. The increase in net travel receipts led
to a considerable rise in the services surplus, which financed a larger part of the trade
deficit than in 2000, while net transport receipts declined in the period under review.
The widening of the income account deficit stems mainly from the increase in net interest
payments. Finally, the transfers balance recorded a larger surplus, due to the increase in
net transfers from the EU and to the receipts from the sale of UMTS licenses, which were
recorded under the "other items" category in August 2001.
Financial account balance
In October 2001, portfolio investment recorded a net inflow of
1,742 million euro, which is mainly due to non-residents' investment in Greek bonds. By
contrast, "other investment" showed a substantial outflow, attributable to the
increase in residents' deposits abroad.
In the January-October 2001 period, direct investment recorded a
1,009 million euro net inflow, compared with a considerable outflow in the corresponding
2000 period. This development is mainly due to the inflow of capital for the acquisition
of a part of INTERAMERICAN's share capital by EUREKO in July 2001 and to the decrease in
residents' investment abroad. Net inflows for portfolio investment reached 9,994 million
euro and were higher than in the corresponding 2000 period, owing to the continuing inflow
of funds, mainly for the purchase of Greek government bonds, but also of bonds convertible
to equity. As regards the "outflow" appearing under "other
investment", this is due both to the increase in claims and the reduction in
liabilities of residents vis-a-vis non-residents. The increase in claims is largely
connected to the gradual release, as from the beginning of 2001, of commercial banks'
foreign currency redeposits with the Bank of Greece, as well as to the adoption, effective
1 January 2001, of a new definition for reserve assets, in accordance with European
Central Bank guidelines, as detailed in previous press releases. The decrease in
residents' liabilities mainly stems from the reduction in non-residents' deposits in
Greece and from the repayment of loans by general government.
As a result of developments in the current and the financial accounts,
Greece's reserve assets (on the basis of the European Central Bank definition) stood at
7.4 billion euro (6.7 billion US dollars) at end-October 2001.