Balance of payments: JUNE-SEPTEMBER 1999
04/02/2000 - Press Releases
In the June-September 1999 period, the current account deficit amounted
to EUR 743 million. The small surplus (of EUR 37 million) observed in the corresponding
period of 1998 was due to special reasons, namely the large net EU transfers. In the same
period of 1997 and 1996, the current account deficit (EUR 1,098 million and EUR 720
million, respectively) was roughly the same to, or even higher than, in the June-September
The increase (EUR 1,082 million) in the trade deficit relative to 1998
was due to the growth of both the non-oil trade deficit and net oil imports. By contrast,
the services balance and the balance on the income account improved: Compared with the
corresponding 1998 period, the surplus on the balance of services rose by EUR 479 million
and the income account deficit decreased by EUR 252 million. The balance on current
transfers, which includes net EU transfers, left a surplus of EUR 1,752 million, EUR 430
million less than in the corresponding period of 1998.
Regarding the financial account, in June-September 1999 net capital
inflows were recorded in all categories of investment, most noticeably in portfolio
investment (EUR 1,123 million) and “other investment” (EUR 881 million). Thus,
Greece’s foreign exchange reserves increased by $1,6 billion.
In January-September 1999, the current account deficit was reduced by
EUR 141 million, compared with the corresponding 1998 period, to EUR 2,629 million. This
improvement resulted from a rise in the surplus on the balance of services and a narrowing
of the income account deficit. At the same time, however, the trade deficit increased and
the surplus on current transfers decreased, relative to the January-September 1998 period.
The increase (of EUR 644 million) in the trade deficit is due to the
growth of the non-oil trade deficit, given that the rise in the import bill more than
offset the growth of export receipts. By contrast, in the same period the net oil import
bill was lower than in 1998. This is expected to be reversed in the months following the
period under consideration, when the substantial rise in world crude oil prices will be
more pronounced. Regarding the services balance in the period under review, the growth of
travel and transportation receipts was considerably higher than that of corresponding
payments, and hence the surplus on the balance of services increased by EUR 527 million.
The reduction (of EUR 602 million) in the income account deficit was mainly the result of
larger inflows related to interest, dividends, profits and compensation of employees,
which were almost twice as high as in the corresponding 1998 period. Finally, the surplus
on current transfers was reduced by EUR 344 million, mainly because of the drop in
emigrants’ remittances, while net EU transfers overshot by EUR 170 million their
January-September 1998 level.
In the period under review, the financial account was positively
influenced by substantial net inflows for portfolio investment (EUR 6,593 million), which
were mostly channelled into equity and Greek government bonds. However, as in 1998, a net
outflow (EUR 742 million) was observed in the “other investment” item, owing to the
relatively low level of net foreign borrowing by general government in the period under
review. As a result, the country’s foreign exchange reserves rose by $3.9 billion to
$22.1 billion at end-September 1999, compared with 17.7 billion at the end of September
1998. At end-December 1999, foreign exchange reserves amounted to $19 billion.