Press Releases

Balance of payments: April 2014

20/06/2014 - Press Releases

Current account balance

In April 2014, the current account balance showed a deficit of €1.2 billion, slightly higher year-on-year, as a rise in the surplus of the services balance and a small contraction in the income account deficit only partly offset increases in the trade deficit and the deficit of the current transfers balance. In any event, total receipts from exports of goods and services rose by 5.4%, while the corresponding import bill increased by 4%; as a result, the external balance of goods and services recorded a small improvement.

The trade deficit increased on account of higher net payments for purchases of ships. However, if sales and purchases of ships are not taken into account, the trade balance improved, despite a reduction in exports, since imports declined even more.

The surplus of the services balance increased by 32% year-on-year, mainly as a result of the improved transport services balance, which almost entirely reflects a rise in the surplus of the sea transport services balance. Furthermore, the surplus of the travel services balance showed an improvement, reflecting a significant rise in non-residents’ arrivals and corresponding travel receipts (of 30.6% and 35.8%, respectively), which offset an increase in travel spending abroad by residents. The “other” services balance also recorded a small surplus, against a small deficit in April 2013.

In the January-April 2014 period, the current account deficit came to €2.2 billion, down by €1.2 billion year-on-year. This development is attributable to improvements in the services, income account and current transfers balances, which more than offset the higher trade deficit.

In more detail, as regards the trade deficit, the higher net payments for purchases of ships (up by €546 million) offset a decline in the net oil import bill and a contraction in the deficit of the balance for goods excluding oil and ships. This contraction is attributable to the lower import bill, given that receipts from exports of goods excluding oil and ships remained almost unchanged. As a result, the trade deficit rose by €220 million.

The €661 million increase in the surplus of the services balance mainly reflects higher net transport receipts and, to a lesser extent, higher net receipts from travel and other services. In more detail, travel spending by non-residents in Greece grew by 27.8% year-on-year, reflecting a 21.1% rise in non-residents’ arrivals, while travel spending by residents abroad rose by 26.9%.

The income account deficit fell by €249 million, mainly as a result of lower net interest payments.

Finally, the current transfers balance showed a surplus of €2.1 billion, up by €485 million year-on-year. This development is attributable to a rise in general government transfer receipts (mainly from the EU).

Capital transfers balance

In April 2014, the capital transfers balance recorded a deficit of €14 million, against a surplus of €41 million in April 2013, reflecting a significant decline in net transfers to general government. In the January-April 2014 period, the surplus of the capital transfers balance came to €1.4 billion, compared with €1.1 billion over the same period in 2013.

The overall transfers balance (current transfers plus capital transfers) recorded a surplus of €3.5 billion in the same period, up by €799 million year-on-year.

Combined current account and capital transfers balance

In April 2014, the combined current account and capital transfers balance (corresponding to the economy’s external financing requirements) showed a deficit of €1.2 billion, compared with €1.1 billion in April 2013. In the January-April 2014 period, this balance showed a deficit of €768 million, against a deficit of €2.3 billion in the same period of 2013.

Financial account balance

In April 2014, non-residents’ direct investment in Greece showed a net outflow (decline) of €60 million, without any remarkable transactions. Residents’ direct investment abroad recorded a net outflow (increase) of €25 million, likewise without any remarkable transactions.

Under portfolio investment, a net inflow of €5.3 billion was recorded, mainly on account of a rise (inflow) in non-residents’ holdings of Greek bonds, Treasury bills and shares of Greek firms.

Under “other” investment, a net outflow of €3.7 billion was recorded mainly on account of a decrease (outflow) in non-residents’ deposit and repo holdings in Greece, which was partly offset by a net increase (inflow) in the outstanding debt of the public and the private sector to non-residents as a result of new general government borrowing from the European Financial Stability Facility (EFSF).

In the January-April 2014 period, non-residents’ direct investment in Greece showed a net inflow of €229 million, while residents’ direct investment abroad showed a net outflow (increase) of €220 million.

Under portfolio investment, a net inflow of €5.6 billion was recorded, mainly on account of a rise in non-residents’ holdings of shares of Greek firms, Greek bonds and Treasury bills. These developments were partly offset by a net increase in residents’ holdings of foreign bonds and Treasury bills, as well as in residents’ investment in foreign financial derivatives.

Under “other” investment, a net outflow of €4.3 billion was recorded chiefly as a result of a decrease (outflow) in non-residents’ deposit and repo holdings in Greece, which was partly offset by a net rise (inflow) in the outstanding debt of the public and the private sector to non-residents.

At end-April 2014, Greece’s reserve assets stood at €5.2 billion, compared with €5.0 billion at end-April 2013.

Note: Balance of payments statistics for May 2014 will be released on 21 July 2014.

Related link: Balance of payments: April 2014 - Table

 

 

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