Balance of payments: Αpril 2013
25/06/2013 - Press Releases
Current account balance
In April 2013, the current account balance showed a deficit of €1.2 billion, up by €242 million (or 25.6%) year-on-year. This development is mainly due to increases in the trade and the income account deficits and a decline in the services surplus. By contrast, the deficit of the current transfers balance narrowed.
The trade deficit increased by €85 million on account of the higher non-oil (trade) deficit, while the net oil import bill fell by €90 million. Specifically, net payments for purchases of ships rose by €108 million, while the import bill for goods excluding oil and ships increased by €244 million (14.2%), thus offsetting a significant rise (of €177 million or 17.5%) in the corresponding export receipts.
The surplus of the services balance fell by €130 million as a result of lower net receipts from services (primarily, transport and, secondarily, travel services). The €124 million contraction in the surplus of the transport services balance reflects lower surpluses in the balances of, primarily, “other” transport services (excluding sea transport services) and, secondarily, sea transport services. As regards the surplus of the travel services balance, it registered a decline of €32 million year-on-year. Specifically, travel spending in Greece by non-residents dropped by €43 million or 12.9%, while travel spending abroad by residents fell by €12 million or 8.2%. Finally, the narrowing (by €26 million) of the “other” services deficit is mainly attributable to financial services and other business services.
The income account deficit rose by €50 million, mainly owing to higher net interest, dividend and profit payments.
Finally, the current transfers balance showed a deficit of €99 million, compared with €122 million in April 2012, reflecting mainly an decrease in general government net receipts (chiefly from the EU). (It should be recalled that gross current transfers from the EU mainly include receipts from the European Agricultural Guidance and Guarantee Fund (EAGGF), as well as receipts from the European Social Fund, while current transfers to the EU include Greece’s contributions (payments) to the Community Budget.)
In the January-April 2013 period, the current account deficit contracted by €2.2 billion or 38.6% year-on-year, to €3.5 billion. This development principally reflects significant declines (of €1.3 billion and €756 million) in both the trade deficit and the income account deficit, respectively, as well as a concurrent rise of €346 million in the current transfers surplus, while the services surplus fell by €145 million.
In more detail, the trade deficit shrank owing to decreases of €382 million (or 12.4%) in the trade deficit excluding oil and ships and €934 million (or 24.4%) in the net oil import bill, while net payments for purchases of ships increased by €51 million (or 12.2%). Receipts from exports of goods excluding oil and ships rose by 7.2%, while the corresponding import bill did not change considerably (down by 1.0%).
A contraction in the services surplus in the January-April 2013 period is mainly attributed to a drop in net transport receipts, which offset an improvement in the travel balance and lower net payments for other services. Travel spending in Greece by non-residents fell by 7.9% year-on-year, while travel spending abroad by residents declined by 18.0%; as a result, a €227 million surplus was recorded, compared with €186 million in the same period of 2012.
The income account deficit fell by €756 million year-on-year, mainly owing to a sharp decline in net interest payments on Greek government bonds held by non-residents (following the PSI).
Finally, the current transfers balance showed a surplus of €1.6 billion, up by €346 million year-on-year. This development is mainly due to the fact that the sectors other than general government (mainly emigrants’ remittances) recorded net receipts of €267 million, against net payments of €28 million in the same period of 2012, while general government net transfer receipts (mainly from the EU) increased by a mere €52 million.
Capital transfers balance
In April 2013, the capital transfers surplus came to €41 million, compared with €26 million in April 2012, reflecting higher net transfers to general government. (Capital transfers from the EU mainly include receipts from the Structural Funds – except for the European Social Fund – and the Cohesion Fund under the Community Support Framework.)
In the January-April 2013 period, the capital transfers balance showed a surplus of €1.1 billion (up by €54 million year-on-year), as a result of a considerable increase in net EU capital transfers to general government (up by €109 million), which more than offset a rise in the net capital transfer payments of the “other” sectors .
The overall transfers balance (current transfers plus capital transfers) recorded a surplus of €2.7 billion in the January-April 2013 period, up by €400 million year-on-year, reflecting the above-mentioned development in both EU current and capital transfers, on the one hand, and net transfer receipts of the “other” sectors (mainly emigrants' remittances), on the other hand.
Combined current account and capital transfers balance
The combined current account and capital transfers balance (corresponding to the economy’s external financing requirements) showed a deficit of €1.1 billion in April 2013, compared with €919 million in April 2012. In the January-April 2013 period, this balance showed a deficit of just €2.4 billion, compared with €4.7 billion in the same period of 2012 (down by 48.7%), i.e. it fell at a faster pace than the current account deficit.
Financial account balance
In April 2013, non-residents’ direct investment in Greece showed a net inflow (increase) of €363 million (against a net outflow of €14 million in the same month of 2012). The most important transactions concerned: (a) a €200 million inflow from the sale of 51% of Folli Follie’s shares in Hellenic Duty Free Shops to the Swiss Group Dufry International AG and (b) a €200 million inflow for the participation of the parent company Crystal Almund (Luxemburg) in the capital increase of its subsidiary Wind Hellas. Residents’ direct investment abroad recorded a net inflow (decline) of €207 million (compared with a net inflow of €452 million in the same month of 2012). The most significant transaction concerned a €208 million inflow for the sale of Hellas SAT (Cyprus), a subsidiary of OTE (Hellenic Telecommunications Organisation S.A.), to Arab SAT (Saudi Arabia) (disinvestment).
Under portfolio investment, a net inflow of €122 million was recorded, mainly on account of a €351 million decline in residents’ investment in foreign bonds (inflow). It should be noted that in April 2012 residents’ holdings of foreign bonds had increased by around €26 billion. This net inflow came also as a result of increases of €238 million and €147 million in non-residents’ purchases of Greek Treasury bills and shares of Greek firms, respectively (inflow). These developments more than offset a €106 million increase in residents’ investment in foreign Treasury bills and a €421 million decline in non-residents’ holdings of Greek government bonds (outflows). Under “other” investment, a net inflow of €1 billion was recorded (compared with a net inflow of €27.6 billion in April 2012), which mainly reflects a €1.4 billion net increase (inflow) in non-residents’ deposit and repo holdings in Greece (including the TARGET account). There was also an inflow owing to a €165 million decline in resident credit institutions’ and institutional investors’ deposit and repo holdings abroad. These developments were partly offset by a €451 million increase (outflow) in foreign investment due to the Greek government’s participation in the capital of the European Stability Mechanism (ESM), as well as a decline of €141 million (outflow) in the outstanding debt of the public and the private sector to non-residents.
In the January-April 2013 period, direct investment showed a net inflow of €1.9 billion (against a net outflow of €81 million in the same period of 2012). Specifically, non-residents’ direct investment in Greece showed a net inflow of €972 million (increase), while residents’ direct investment abroad showed an net inflow of €893 million (decline).
Under portfolio investment, a net inflow of €664 million was observed (against a net outflow of €64.8 billion in the same period of 2012). Specifically, a capital inflow was recorded mainly due to decreases of €2.1 billion and €335 million in resident institutional investors’ purchases of foreign bonds and shares, respectively, as well as increases of €254 million and €144 million in non-residents’ investment in shares of Greek firms and residents’ derivatives, respectively (inflow). By contrast, a capital outflow was recorded on account of declines (disinvestment) of €1.4 billion and €177 million in non-residents’ holdings of Greek government bonds and Treasury bills, respectively, and increases of €323 million and €235 million in residents’ investment in foreign Treasury bills and financial derivatives, respectively.
Under “other” investment, a net outflow of €707 million (against a net inflow of €70.1 billion in the same period of 2012) is mainly attributable to a €21.7 billion decrease in non-residents’ deposit and repo holdings in Greece. This development was partly offset by a €16 billion decline in resident institutional investors’ deposit and repo holdings abroad, as well as a €5.6 billion rise in the net outstanding debt of the public and the private sector to non-residents (inflow).
At end-April 2013, Greece’s reserve assets stood at €5 billion, compared with €5.5 billion at end-March 2013. (It should be recalled that, since Greece joined the euro area in January 2001, reserve assets, as defined by the European Central Bank, include only monetary gold, the "reserve position" with the IMF, "Special Drawing Rights", and Bank of Greece claims in foreign currency on residents of non-euro area countries. Excluded are euro-denominated claims on non-euro area residents, claims (in foreign currency and in euro) on euro area residents, and the Bank of Greece share in the capital and reserves of the ECB.)
Note: Balance of payments data for May 2013 will be released on 19 July 2013.
Related link: Balance of payments: April 2013 - Table