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Balance of Payments: June 2015

20/08/2015 - Press Releases

Balance of Payments: June 2015  (1)

Current account

In June 2015, the current account of the balance of payments showed a surplus of €1 billion, down by €251 million year-on-year. This development stemmed mainly from the deteriorated balances of the primary and the secondary income accounts and only to a lesser extent from the relatively small decline in the surplus of the balance of goods and services.
1
More specifically, the deficit of the balance of goods grew by €23 million year-on-year. This increase reflected the higher deficit of the balance of goods excluding oil and ships, as net payments for purchases of ships fell, thus almost fully offsetting an increase in the net oil import bill. The latter increase reflected lower oil exports, which fell by almost half, in spite of a slight rise in oil imports. Imports of goods excluding oil and ships remained unchanged, while the corresponding exports declined by 1.9% year-on-year.

The surplus of the services balance fell by €39 million, as a result of lower net receipts from transport services (mainly from services other than sea transport) and from other services. By contrast, the travel services balance improved. The surplus of the travel services balance increased by €33 million, mainly as a result of a 12.4% rise in non-residents' arrivals in June and a 1.2% rise in the corresponding receipts.

The deficit of the primary income account increased by €100 million in June 2015, mainly due to the lower surplus, relative to June 2014, of the other primary income, which includes subsidies and taxes on production and products. Moreover, the surplus of the secondary income account registered a decrease of €89 million, due to lower net receipts of General Government and other sectors.

In the first half of 2015, the current account of the balance of payments showed a deficit of €1.7 billion, up by €373 million year-on-year. This increase is mainly attributable to the deteriorated balances of both the primary and secondary income accounts. By contrast, the balance of goods showed an improvement, which more than offset a slight decline in the surplus of the services balance, resulting in an improvement in the overall balance of goods and services. Overall, receipts from exports of goods and services fell by 3.6% in the first half of 2015, but the corresponding import bill decreased at a faster pace of 6.5%.

The deficit of the balance of goods decreased by €887 million, primarily due to lower net payments for purchases of ships and, secondarily, due to a lower net oil import bill. By contrast, the deficit of the balance of goods excluding oil and ships increased, with the relevant export receipts remaining almost unchanged and the import bill rising by 6.5%.

The surplus of the services balance shrank to a small extent, as net receipts from transport and other services registered a decline, which was partly offset by higher net travel receipts. In the first half of 2015, total non-residents’ arrivals increased by 20.8% year-on-year and the corresponding receipts grew by 8.2%.

In the first half of 2015, the surplus of the primary income account turned into a deficit, mainly stemming from higher net investment income payments (interest, dividends and profits) and lower net other primary income inflows. The secondary income account also recorded a deficit, compared with a surplus in the same period of 2014.


Capital account

In June 2015, the capital account showed a surplus of €133 million, down by €274 million year-on-year. In the first half of 2015, the capital account showed a surplus of €606 million, down by €1.2 billion year-on-year.


Combined current and capital account

In June 2015, the combined current and capital account (corresponding to the economy's external financing requirements) showed a surplus of €1.1 billion, down by €525 million year-on-year. In the first half of 2015, a deficit of €1.1 billion was recorded, compared with a surplus of €491 million in the same period of 2014.


Financial account

In June 2015, no significant changes were recorded under direct investment.

Under portfolio investment, a net increase of €941 million in residents' external assets reflected mainly a rise of €1.2 billion in residents' investment in shares of foreign firms and a decrease of €283 million in residents' holdings of foreign bonds and Treasury bills. A drop of €732 million in residents' net external liabilities reflected mainly a net decrease of €700 million in non-residents' investment in shares of Greek firms.

Under other investment, net increases in residents' external assets and liabilities reflected mainly a statistical adjustment related to the issuance of banknotes (
2) . In addition, the net increase in assets is also attributable to a rise of €792 million in residents' deposit and repo holdings abroad. At the same time, the net increase in liabilities resulted also from a net rise of €1.4 billion in non-residents’ deposit and repo holdings in Greece (the TARGET account included).

In the first half of 2015, residents’ net assets from direct investment abroad rose by €143 million, while the corresponding liabilities arising from non-residents’ direct investment in Greece grew by €84 million.

Under portfolio investment, a net decrease of €4.1 billion in residents’ external assets was mainly due to a drop of €11.3 billion in residents’ holdings of foreign bonds and Treasury bills, which was partly offset by a rise of €7 billion in residents’ investment in shares of foreign firms. Moreover, residents’ net external liabilities fell by €3.6 billion, mainly on account of a decline in non-residents’ investment in Greek government bonds and Treasury bills and in shares of Greek firms.

Finally, under other investment, net increases in residents' external assets and liabilities reflected mainly a statistical adjustment related to the issuance of banknotes, as already mentioned (
3). In addition, in the first half of 2015, residents’ deposit and repo holdings abroad recorded a net increase of €5.2 billion, as did non-residents’ deposit and repo holdings in Greece that recorded a net rise of €20.8 billion (the TARGET account included). These developments were largely offset by a decrease in residents’ loan liabilities.

At end-June 2015, Greece's reserve assets stood at €5.1 billion, compared with €5.0 billion at end-June 2014.

Note: Balance of payments data for July 2015 will be released on 21 September 2015.


1) It should be noted that, as from reference month January 2015, the presentation of the balance of payments is based on the Balance of Payments Manual 6th edition (BPM6). For more information on the transition to the new BPM6 methodology, see the relevant Press Release published by the Bank of Greece on 23 March 2015.

2) As from January 2015, other investment includes a statistical adjustment related to the issuance of (euro) banknotes above the key for subscription to the European Central Bank’s capital, which is recorded under liabilities, representing liabilities of the Bank of Greece vis-à-vis the Eurosystem. This entry is mirrored by an entry of the same amount under assets, representing residents’ assets vis-à-vis the Eurosystem. In June 2015, the increase in assets as a result of such statistical adjustment came to €5,099 million and the corresponding increase in liabilities came to €5,006 million.

3) See footnote 2. In the first half of 2015, the increase in assets and liabilities as a result of such statistical adjustment came to €17.6 billion each.


Related link:
Balance of Payments: June 2015 - Table

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