Balance of Payments: MAY 2001
03/08/2001 - Press Releases
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.
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
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.