Balance of Payments: May 2019

19/07/2019 - Press Releases

Current account

In May 2019, the current account showed a surplus of €301 million, up by €263 million year-on-year, mainly due to an improvement in the secondary income account, as well as in the services balance and in the primary income account.

The balance of goods showed a deficit that was higher by €756 million year-on-year. This development is attributable, on the one hand, to a deceleration in export growth, resulting from a decrease in the value of oil exports, and, on the other, to a pick-up in import growth. Total exports of goods rose by 3.7% (4.1% at constant prices). Specifically, non-oil exports of goods grew at a rate of 9.3% (9.2% at constant prices). Imports of goods accelerated significantly, registering increases of 19.6% and 17.3% at current and constant prices, respectively.

The improvement in the surplus of the services balance was moderate, as higher net travel and transport receipts were partly offset by higher net payments for other services. It should be noted that travel receipts increased by 9.3%, despite a 2.6% decline in non-residents’ arrivals. In addition, the amelioration in the transport balance is mostly explained by a decrease in the deficit of the other transport (excluding sea transport) balance.

The improvement in the primary income account is attributable, primarily, to lower net interest, dividend and profit payments and, secondarily, to higher net receipts from other primary income, which includes taxes and subsidies on products and production. Finally, the significant improvement in the secondary income account is accounted for by the transfer of income earned on SMP/ANFA holdings and the reimbursement of the step-up interest rate margin.

In the January-May 2019 period, the current account showed a deficit of €4.8 billion, up by €124 million year-on-year. This development is attributable to an increase in the deficit of the balance of goods, which was largely offset by a rise in the surplus of the services balance and an improvement in the primary and secondary income accounts.

The deficit of the balance of goods grew due to a slowdown in export growth, combined with a sustained increase in imports. Total exports of goods rose by 3.7% at current prices and 1.1% at constant prices, while non-oil exports of goods grew by 6.8% both at current and at constant prices. Oil exports are on a downward path, despite an increase in the corresponding imports, which resulted in a significant widening of the deficit of the oil balance. Total imports of goods increased by 8.5% at current prices (6.3% at constant prices).

The rise in the surplus of the services balance is due to an improvement in, primarily, the transport balance and, secondarily, the travel balance, while the deficit of the other services balance widened. Transport (mainly sea transport) receipts rose by 8.8%. At the same time, travel receipts increased by 14.4%, even though non-residents’ arrivals showed a small decline of 0.9%.

Capital account

In May 2019, the capital account registered a deficit, against a surplus in the same month a year earlier, while in the January-May 2019 period, the capital account surplus showed a small decrease.

Combined current and capital account

In May 2019, the combined current and capital account (corresponding to the economy’s external financing requirements) showed a surplus of €276 million, up by €223 million year-on-year. In the January-May 2019 period, the combined current and capital account showed a deficit of €4.6 billion, up by €134 million year-on-year.

Financial account

In May 2019, under direct investment, residents' net external liabilities, which represent non-residents' direct investment in Greece, registered an increase of €695 million; the most important transaction concerned the acquisition of NBG Pangaea Real Estate Investment Company by Invel Real Estate B.V. (Netherlands).

Under portfolio investment, a net decrease in residents' external assets is chiefly attributable to a decline of €606 million in residents' holdings of foreign bonds and Treasury bills. A net increase in their liabilities is due to a rise of €531 million in non-residents' holdings of Greek government bonds and Treasury bills.

Under other investment, a net increase in residents' external assets mainly reflects a rise of €709 million in residents' deposit and repo holdings abroad. A net decline in liabilities reflects mainly a fall of €1.4 billion in non-residents' deposit and repo holdings in Greece (the TARGET account included).

In the January-May 2019 period, under direct investment, residents' net external assets increased by €172 million and residents' net external liabilities, which represent non-residents' direct investment in Greece, rose by €1.9 billion.

Under portfolio investment, a net decrease in residents' external assets is chiefly attributable to a decline of €1.8 billion in residents' holdings of foreign bonds and Treasury bills. A net increase in their liabilities is due to a rise of €4.7 billion in non-residents' holdings of Greek government bonds and Treasury bills.

Under other investment, a net decrease in residents' external assets mainly reflects a decline of €1.6 billion in residents' deposit and repo holdings abroad. A net decline in liabilities reflects chiefly a drop of €6.0 billion in non-residents' deposit and repo holdings in Greece (the TARGET account included), as well as a €782 million decrease in the outstanding debt of the public and the private sector to non-residents.

At end-May 2019, Greece's reserve assets remained unchanged year-on-year, at €6.4 billion.

Note: Balance of payments data for June 2019 will be released on 20 August 2019.