Balance of payments: June 2014

20/08/2014 - Press Releases

Current account balance

In June 2014, the current account balance showed a surplus of €1.4 billion, up by 53% year-on-year, chiefly on account of increased surpluses of the services and current transfers balances. An improvement was also recorded in the income account balance. These developments were partly offset by a rise in the trade deficit. The overall balance of goods and services recorded a surplus of €1.2 billion, compared with €1.0 billion in June 2013.

The trade deficit grew by €208 million year-on-year, owing to considerably higher net payments for purchases of ships, which were largely offset by declines in the net oil import bill and the trade deficit excluding oil and ships. More specifically, receipts from exports of goods excluding oil and ships rose by 17.4%, while the corresponding import bill also increased, albeit at a slower pace.

The surplus of the services balance increased by €394 million year-on-year, mainly as a result of higher surpluses of the travel and transport services balances. In more detail, travel receipts increased by 16.3%, reflecting a 13.7% rise in non-residents’ arrivals. At the same time, the increased surplus of the transport services balance reflects a rise in the surplus of the air transport services balance. Finally, the “other” services balance recorded a surplus, against a deficit in June 2013.

In the first half of 2014, the current account deficit came to €1.1 billion, down by €1.3 billion year-on-year. This development is attributable to improvements in the services, income account and current transfers balances, which more than offset the higher trade deficit.

In more detail, as regards the trade deficit, increased net payments for purchases of ships, which almost tripled, offset a contraction in the deficit of the balance of goods excluding oil and ships. This contraction is attributable to higher export receipts, given that the corresponding import bill remained almost unchanged. As a result, the trade deficit rose by €772 million.

The €1.2 billion rise in the surplus of the services balance mainly reflects increased net transport receipts, as well as higher net receipts from travel and other services. As regards travel spending by non-residents in Greece, a year-on-year increase of 13.4% was recorded, reflecting a 15.6% rise in non-residents’ arrivals.

The income account deficit fell by €396 million, mainly as a result of lower net interest payments.

Finally, the current transfers balance showed a surplus of €2.5 billion, up by €456 million year-on-year. This development is attributable to a rise in general government transfer receipts (mainly from the EU).

Capital transfers balance

In June 2014, the capital transfers balance showed a considerable surplus, against a deficit in June 2013. In the first half of 2014, the surplus of the capital transfers balance came to €1.8 billion, compared with €1.1 billion over the same period in 2013.

The overall transfers balance (current transfers plus capital transfers) recorded a surplus of €4.3 billion in the first half of 2014, up by €1.2 billion year-on-year.

Combined current account and capital transfers balance

In June 2014, the combined current account and capital transfers balance (corresponding to the economy’s external financing requirements) showed a surplus of €1.8 billion, compared with €887 million in June 2013. In the first half of 2014, this balance showed a surplus of €726 million, against a deficit of €1.3 billion in the same period of 2013.

Financial account balance

In June 2014, non-residents’ direct investment in Greece showed an increase (net inflow) of €55 million. The most significant transaction concerns an inflow of €85.3 million due to the sale of Eurobank Properties Real Estate Investment Company shares held by Eurobank Ergasias S.A. to a foreign investment company, Wellington Management Company LLP (USA). Residents’ direct investment abroad recorded an increase (net outflow) of €40 million, without any remarkable transactions.

Under portfolio investment, a net outflow of €531 million was recorded, mainly on account of a rise (outflow) in residents’ holdings of foreign bonds and Treasury bills, which was mainly offset by an increase (inflow) in non-residents’ investment in shares of Greek firms, as well as in Greek government bonds and Treasury bills.

Under “other” investment, a net outflow of €668 million was recorded, mainly on account of a decrease (outflow) in non-residents’ deposit and repo holdings in Greece, which was partly offset by a net increase (inflow) in the outstanding debt of the public and the private sector to non-residents and a decrease (inflow) in residents’ deposit and repo holdings abroad.

In the first half of 2014, non-residents’ direct investment in Greece showed a net inflow of €936 million, while residents’ direct investment abroad showed a net outflow (increase) of €299 million.

Under portfolio investment, a net inflow of €4.6 billion was recorded, mainly on account of a rise in non-residents’ holdings of shares of Greek firms. This development was partly offset by a net increase in residents’ holdings of foreign bonds, Treasury bills and financial derivatives.

Under “other” investment, a net outflow of €5.1 billion was recorded, mainly on account of a decline (outflow) in non-residents’ deposit and repo holdings in Greece, which was largely offset by a net increase (inflow) in the outstanding debt of the public and the private sector to non-residents and a net decrease (inflow) in residents’ deposit and repo holdings abroad.

At end-June 2014, Greece’s reserve assets stood at €5.0 billion, compared with €4.3 billion at end-June 2013.

Note: Balance of payments data for July 2014 will be released on 22 September 2014.