Balance of payments: December 2016
20/02/2017 - Press Releases
In December 2016, the current account showed a deficit of €933 million, up by €150 million year-on-year. More specifically, total exports of goods and services grew faster (10.0%) than the corresponding imports (2.9%) and the overall balance of goods and services improved. By contrast, the primary and secondary income accounts deteriorated.
The deficit of the balance of goods recorded a small increase year-on-year, as the improvement in the oil balance and the balance of ships was offset by the increase in the deficit of the balance of goods excluding oil and ships. This last deterioration is due to the fact that, while the value of exports of goods excluding oil and ships remained almost unchanged, a 4.0% rise was recorded in the value of the corresponding imports.
The surplus of the services balance grew by €235 million year-on-year, mainly as a result of higher net other services receipts, mostly financial and other business services. Net travel and transport receipts increased to a lesser extent. In December, the inbound flow of non-resident travellers increased by 15.6%, but the corresponding receipts rose by a mere 4.7%.
In December 2016, the primary income account showed a surplus of €133 million, down by €214 million year-on-year. This development is almost entirely attributable to lower net receipts under other primary income, which includes taxes and subsidies on products and production. The secondary income account showed a deficit of €97 million, against a surplus of €39 million in December 2015, on account of an increase in general government net payments.
In 2016, the current account showed a deficit of €1.1 billion, against a surplus of €206 million in 2015. This development is mainly accounted for by a decrease in the surplus of the services balance, which was not offset by a reduction in the deficit of the balance of goods, resulting in a deterioration of the overall balance of goods and services. Overall, the value of exports of goods and services declined by 6.1%, while the value of imports decreased by 4.2%. Moreover, the primary and secondary income accounts worsened.
In 2016, the balance of goods showed an amelioration of €649 million, which is attributable to the reduced deficit of the oil balance (down by €1.4 billion) and to lower net payments for purchases of ships (down by €290 billion) in comparison with 2015. By contrast, the deficit of the balance of goods excluding oil and ships grew, chiefly on account of an increase in the value of imports, which was larger than the rise in the value of exports. It should be noted that, at constant prices, total exports of goods rose by 6.0%, reflecting mainly a rise in the volume of oil exports, while exports of goods excluding oil and ships also grew by 3.9%.
The surplus of the services balance dropped by €1.6 billion in comparison with 2015, mainly due to a significant decline (of €1.2 billion) in net transport receipts, which is largely attributable to capital controls. Net travel receipts also recorded a fall (of €878 million). Total non-residents' arrivals increased by 5.1%, while the corresponding receipts declined by 6.4%. These developments were partly offset by an improvement in the other services balance, the surplus of which more than doubled.
The primary income account showed a surplus of €750 million in 2016, down by €276 million in comparison with 2015. This deterioration is attributable to higher net interest, dividend and profit payments and lower net receipts under other primary income. Finally, the deficit of the secondary income account increased by €71 million, on account of higher net general government payments, which were partly offset by higher net receipts of the sectors other than general government.
In December 2016, the capital account showed a surplus of €280 million, up by €143 million year-on-year, while in 2016, it showed a surplus of €1 billion, down by €953 million compared with the surplus in 2015.
Combined current and capital account
In December 2016, the combined current and capital account (corresponding to the economy's external financing requirements) showed a deficit of €654 million, almost the same as in December 2015. In 2016, a small deficit of €68 million was recorded, against a surplus of €2.2 billion in 2015.
In December 2016, under direct investment, residents' external assets rose by €135 million without any remarkable transactions. Residents' external liabilities, which represent non-residents' direct investment in Greece, increased by €312 million. The most important transactions concern: (a) the payment by TAP AG (Switzerland) to a domestic supplier on behalf of TAP AG (Greece) and (b) the contribution by D-Marine Investments Holding BV (Netherlands) - the direct investor - to the share capital of the Greek company Home Holdings SA for the acquisition of Ionian Hotel Enterprises SA, owner of the Athens Hilton hotel.
Under portfolio investment, a rise in residents' external assets is mainly attributable to an increase (of €766 million) in residents' holdings of foreign bonds and Treasury bills, which was partly offset by a decline in their holdings of foreign equities. A decrease in liabilities reflects mainly a decline (of €307 million) in non-residents' holdings of Greek government bonds and Treasury bills.
Under other investment, a decrease in residents' assets reflects mainly a decline (of €1.3 billion) in residents' (credit institutions' and institutional investors') deposit and repo holdings abroad. Liabilities in this category fell, chiefly reflecting a €305 million drop in non-residents' deposit and repo holdings in Greece (the ΤARGET account included) and a €327 million decline, owing to the statistical adjustment related to the holdings of euro banknotes.
In 2016, residents' assets from direct investment abroad declined by €622 million, while the corresponding liabilities, that represent non-residents' direct investment in Greece, increased by €2.8 billion, against a rise of €1.0 billion in 2015.
Under portfolio investment, an increase in residents' external assets is mainly attributable to a rise of €9.8 billion in residents' holdings of foreign bonds and Treasury bills, which was partly offset by a decrease of €2.7 billion in residents' investment in foreign equities. A drop in residents' external liabilities is mainly attributable to a fall in non-residents' holdings of Greek government bonds and Treasury bills.
Under other investment, a decline in residents' external assets largely reflects a decrease of €9.7 billion in resident credit institutions' and institutional investors' deposit and repo holdings abroad, and a drop owing to the statistical adjustment related to holdings of euro banknotes (down by €5.7 billion). On the liabilities side, a drop was recorded, which is mainly attributable to a decrease of €9.1 billion in non-residents’ deposit and repo holdings in Greece (the TARGET account included) and to the effect of the statistical adjustment (down by €6.3 billion). These developments were partly offset by a €6.8 billion increase in the outstanding debt of the public and the private sector to non-residents.
At end-December 2016, Greece’s reserve assets stood at €6.5 billion, compared with €5.5 billion at end-December 2015.
Note: Balance of payments data for January 2017 will be released on 23 March 2017.
Related link: Balance of payments: December 2016 - Table