Press Releases

Balance of Payments: MAY 2001

03/08/2001 - Press Releases

Current account

In May 2001 the current account balance improved for a second consecutive month, recording a deficit of 815 million, i.e €187 million lower than in the corresponding month of 2000. This improvement was due to a decrease in the trade deficit and an increase in the surplus of current transfers, while the services surplus declined and the income deficit increased compared with May 2000.

The year-on-year decrease in the trade deficit in May 2001 resulted mainly from a drop in the non-oil trade deficit, as well as from a reduction in net oil imports. As regards the services balance, the lower surplus stemmed from a fall in net transport receipts and, to a much lesser extent, travel receipts. Besides, the higher surplus on current transfers reflects a considerable year-on-year rise in net EU transfers, which stood at relatively low levels in the first quarter of 2001. Lastly, the increase in the income account deficit was due to an increase in net payments of interest, dividends and profits.

In the January-May 2001 period the current account deficit decreased by 289 million euro relative to the corresponding period of 2000 and came to €3,257 million euro. This development stemmed from an increase in the services surplus, as both the trade deficit and the transfers surplus remained at about the same levels as in the corresponding period of 2000, while the income deficit increased.

The trade deficit in the first five months of 2001 recorded only a small increase, which was entirely accounted for by the rise in net oil imports, while the increase in non-oil export receipts more than offset the rise in the non-oil import bill; as a result the non-oil trade deficit declined by €114 million. The fast growth of net travel and transport receipts led to a considerable rise in the services surplus, which now covers a larger share of the trade deficit. The higher deficit on the income account stemmed mainly from an increase in net payments for interest, dividends and profits. Finally, the balance on current transfers recorded a surplus, which was marginally smaller than in the corresponding period of 2000, owing to the relatively low inflows in the first quarter of 2001.

Financial account

In the January-May 2001 period, direct investment recorded a small net outflow of about €5 million, because residents' investments abroad were higher than non-residents' investments in Greece. Portfolio investment amounted to €427 million, because the inflow due to redemptions of foreign bonds held by residents was more than double the outflow due to redemptions of Greek bonds held by non-residents. The "outflow" appearing in "other investment" partly reflects a decline in foreign exchange reserves following their calculation according to the ECB definition.

As a result of developments in the current and financial accounts, Greece's foreign exchange reserve assets stood at 7.8 billion (USD 6.4 billion) at end-May 2001. It should be recalled that as from 1 January 2001 the level of foreign exchange reserves has been affected by the gradual release of credit institutions' foreign currency redeposits with the Bank of Greece, as well as by the calculation of reserve assets according to the ECB definition, as already mentioned. According to this definition, reserve assets do not include: a) claims on non-euro area residents denominated in euro, b) claims on euro area residents denominated in foreign currency and euro and c) the contribution of the Bank of Greece to the capital and foreign reserve assets of the ECB.

This website uses cookies for the optimization of you user experience. Learn More
I Accept