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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.

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