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Balance of payments: March 2014

22/05/2014 - Press Releases

Current account balance

In March 2014, the current account balance showed a deficit of just €44 million, down from €1.2 billion year-on-year. This development is mainly due to the higher surpluses of the services and current transfers accounts, as well as the lower income account and trade deficits.

The trade deficit contracted, mainly as a result of a decline in the net oil import bill, but also of an improvement in the trade balance excluding oil and ships. By contrast, net payments for purchases of ships increased.

The surplus of the services balance almost doubled year-on-year, mainly on account of the improved transport services balance, which reflects almost exclusively a higher surplus in the sea transport services balance. The “other” services balance showed a surplus – against a deficit year-on-year – which is mainly attributable to construction services. Finally, the surplus of the travel services balance improved, reflecting a considerable rise (of 26%) in non-residents’ arrivals.

In the first quarter of 2014, the current account deficit almost halved year-on-year to €1.05 billion. This development reflects increases in the services and current transfers surpluses, as well as a decline in the income account deficit, while the trade deficit did not show any notable changes.

Specifically regarding the trade deficit, higher net payments for purchases of ships (up by €212 million) offset the lower net oil import bill and the slightly contracted trade deficit excluding oil and ships, which is largely due to a decrease in the corresponding import bill. Receipts from exports of goods excluding oil and ships did not change considerably.

The rise in the services surplus (up by €464 million) in the first quarter of 2014 is attributable to increased net receipts, primarily, from transport services and, secondarily, from travel and other services. More specifically, travel spending in Greece by non-residents rose by 22% year-on-year, reflecting a 16% increase in non-residents’ arrivals; at the same time, residents’ travel spending abroad rose by 16%.

The income account deficit fell by €245 million year-on-year, owing to a decline in net interest payments.

Finally, the current transfers balance showed a surplus of €2.2 billion, up by €518 million year-on-year. This development is mainly due to higher general government net transfer receipts (mainly from the EU).

Capital transfers balance

In March 2014, the capital transfers surplus came to €6.7 million, compared with €461 million in March 2013, reflecting significantly lower net transfers to general government. In the first quarter of 2014, the capital transfers balance showed a surplus of €1.5 billion, up from €1.1 billion year-on-year.

The overall transfers balance (current transfers plus capital transfers) recorded a surplus of €3.7 billion in the first quarter of 2014, up by €887 million year-on-year.

Combined current account and capital transfers balance

The combined current account and capital transfers balance (corresponding to the economy’s external financing requirements) showed a deficit of €38 million in March 2014, compared with €780 million in March 2013. In the first quarter of 2014, this balance showed a surplus of €412 million, against a deficit of €1.2 billion in the same period of 2013.

Financial account balance

In March 2014, non-residents’ direct investment in Greece recorded a net inflow of €233 million. The most significant transaction concerned an inflow of €200 million for the participation of parent company Crystal Almond (Luxemburg) in the capital increase of its subsidiary Wind Hellas. Residents’ direct investment abroad recorded an increase (outflow) of €36 million, without any remarkable transaction.

Under portfolio investment, a net inflow of €3 billion was recorded, due to, primarily, a decline (inflow) in residents’ holdings of foreign bonds and Treasury bills and, secondarily, a rise (inflow) in non-residents’ holdings of shares of Greek firms.

As regards “other” investment, a net outflow of €3.2 billion was recorded, which mainly reflects a decrease (outflow) in non-residents’ deposit and repo holdings in Greece.

In the first quarter of 2014, non-residents’ direct investment in Greece showed a net inflow of €288 million, while residents’ direct investment abroad recorded a net outflow (increase) of €195 million.

Under portfolio investment, a net inflow of €310 million was observed, mainly on account of a rise in non-residents’ purchases of shares of Greek firms and a decline in residents’ investment in foreign bonds and Treasury bills. These developments were partly offset by a drop in non-residents’ holdings of Greek government bonds and Treasury bills (outflow).

Under “other” investment, a net outflow of €584 million is mainly attributable to a decrease in the net outstanding debt of the public and the private sector to non-residents.

At end-March 2014, Greece’s reserve assets remained unchanged year-on-year, at €5.5 billion.

Note: Balance of payments data for April 2014 will be released on 20 June 2014.

Related link: Balance of payments: March 2014 - Table

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