Balance of payments: MARCH 2007
22/05/2007 - Press Releases
Current account balance
In March 2007, the current account deficit narrowed by
€212 million year-on-year and came
to €3,098 million. This development reflects a decline principally of the trade
deficit and, secondarily, of the income account deficit.
The year-on-year decrease in the overall trade deficit by
€322 million reflects a drop in both the net oil import bill and the trade
deficit excluding oil and ships, which is accounted for mainly by lower imports.
By contrast, net payments for purchases of ships more than doubled.
The overall surplus of the services balance showed a small
decline of €10 million, as a result of an increase in net payments for
"other services", which more than
offset a rise in the surpluses of the balances of travel and transport services.
The narrowing of the income account deficit by €30 million is
mainly attributable to lower net interest, dividend and profit payments.
Finally, the surplus of the current transfers balance fell to
€130 million year-on-year, as net
EU transfers to both general government and the other sectors dropped. (It
should be recalled that gross current transfers from the EU mainly include
receipts from the Guarantee Section of the European Agricultural Guidance and
Guarantee Fund (EAGGF) in the context of the Common Agricultural Policy, as well
as receipts from the European Social Fund, while current transfers to the EU
include Greece's contributions (payments) to the
In the first quarter of 2007, the current account
deficit grew by €924 million over the same period of 2006 and reached €9,011
million, reflecting chiefly a €500 million decrease in the current transfers
surplus and, secondarily, the growth of the trade and the income account
deficits. By contrast, a small rise was observed in the services surplus.
The widening of the overall trade deficit by €330 million was
a mainly a result of a €646 million increase in net payments for purchases of
ships. Moreover, the trade deficit excluding oil and ships registered a small
rise (of €62 million). Specifically, receipts from goods exports (excluding oil
and ships) grew by €113 million or 4.1%, while payments for corresponding
imports rose by €175 million or 2.0%. By contrast, the net oil import bill
dropped by €377 million.
The services surplus expanded by €45 million, reflecting
improvements in the transport and travel balances, which were partly offset by
an increase in net payments for other services. Specifically, it should be noted
that receipts for travel services grew by €56 million or 10.8% and receipts for
transport services by €111 million or 3.1%.
The income account deficit rose by €139 million, as a result
of higher net interest, dividend and profit payments.
Finally, underlying the considerable decline in the current
transfers surplus were mainly higher general government payments to the EU (in
February) and, secondarily, lower receipts (in February and March).
Capital transfers balance
In March 2007, the capital transfers balance showed a
surplus of €1,076 million, €447 million up year-on-year. (Capital transfers
mainly include receipts from the Structural Funds -
except for the European Social Fund - and the Cohesion
Fund under the Community Support Framework.) Thus, despite the decline in the
current transfers surplus already mentioned, the overall transfers balance
showed a surplus which was considerably higher than in March 2006.
In January-March 2007, the capital transfers balance
showed a surplus of €1,917 million, €1,180 million up year-on-year. This
reflects exclusively a rise in EU capital transfers to general government. Thus,
the overall transfers balance recorded a surplus of €2,296 million, which
was €680 million higher than in the corresponding period of 2006.
Combined current account and capital transfers balance
(according to the old method of presentation)
The combined current account and capital transfers balance
(according to the old method of presentation) showed a deficit of €2,002 million
in March 2007, €659 million down year-on-year. In January-March 2007,
this deficit came to €7,094 million, compared with €7,350 million during the
same period of 2006.
Financial account balance
In March 2007, a net outflow of €151 million was
recorded under direct investment. Specifically, residents'
investment abroad came to €346 million and chiefly concerned an outflow of €100
million as an "endowment" by EFG
EUROBANK - ERGASIAS S.A. to its branch in Poland, as well
as a €142 million increase in the said bank's
participation in the share capital of the Turkish TEKFENBANK A.S. (from 30% to
70%). Non-residents' investment in Greece reached €195
million. Under portfolio investment, a considerable net inflow of €4,444 million
was recorded, mainly reflecting non-residents' purchases
of Greek government bonds and shares of Greek firms (of €4.1 billion and €1.2
billion respectively). These developments were offset to a small extent mainly
by residents' purchases of foreign bonds and treasury
bills, worth €572 million and €191 million respectively. "Other" investment
recorded a net outflow of €1,765 million, mainly because the rise in resident
credit institutions' deposit and repo holdings abroad
and, to a lesser extent, loan repayments by residents were only partly offset by
the increase in non-resident credit institutions’ corresponding investment in
In January-March 2007, direct investment showed a net
outflow of €2,052 million. Specifically, net inflows of non-residents'
funds for direct investment in Greece came to €138 million, while net outflows
of residents' funds for direct investment abroad reached
€2,190 million. During the same period, a net inflow of €11,052 million was
recorded under portfolio investment, as the inflow of non-residents'
funds for investment in Greece (mainly in Greek government bonds and shares of
Greek firms, of €10.8 billion and €4.0 billion respectively) was considerably
higher than the outflow of residents' funds for
investment in foreign bonds (worth €3.6 billion). Finally, under
"other" investment, a net outflow of €2,049
million mainly reflects the fact that the outflow of residents'
funds to deposits and repos abroad (of €10 billion) and -
to a smaller extent - repayments of loans (mainly of the
general government sector, of €1.2 billion) abroad were offset to a considerable
degree by the inflow of non-residents' funds to deposits
and repos in Greece (of €8.8 billion).
At end-March 2007, Greece's
reserve assets reached €2.2 billion. (It should be recalled that, since Greece
joined the euro area in January 2001, reserve assets, as defined by the European
Central Bank, include only monetary gold, the "reserve position" with the IMF,
"Special Drawing Rights", and Bank of Greece claims in foreign currency on
residents of non-euro area countries. Conversely, reserve assets do not include
claims in euro on residents of non-euro area countries, claims in foreign
currency and in euro on residents of euro area countries, and the Bank of Greece
participation in the capital and the reserve assets of the ECB.)
Note: Balance of payments data for April 2007 will be
released on 22 June 2007.