Balance of Payments: APRIL 2008
24/06/2008 - Press Releases
Current account balance
In April 2008, the current account deficit grew by €320 million year-on-year,
to reach €3,459 million, mainly as a result of an increase in the trade deficit,
which was partly offset by rises in the surpluses mainly of the current
transfers balance and - to a much smaller extent - of the services balance.
The year-on-year increase of €709 million in the overall trade deficit is
almost exclusively attributable to increases of €370 million and €301 million in
net payments for purchases of ships and in the net oil import bill. The trade
deficit excluding oil and ships grew by only €38 million.
Despite a remarkable €120 million rise in net transport receipts (mainly from
merchant shipping), the surplus of the services balance grew by only €49 million.
This development reflects the fact that the rise in net travel receipts was
small (€16 million), while at the same time net payments for other services grew
(by €86 million).
The limited rise (of €13 million) in the income account deficit is
exclusively attributable to an increase in net interest, dividend and profit
payments by the same amount.
The surplus of the current transfers balance rose by €353 million year-on-year,
exclusively because net EU transfers to general government rose. (It should be
noted that gross current transfers from the EU mainly include receipts from the
Guarantee Section of the European Agricultural Guidance and Guarantee Fund (EAGGF)
in the context of the Common Agricultural Policy, 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 January-April 2008, the current account deficit rose by €692
million over the same period in 2007 and reached €12,853 million. This
development reflects substantial increases in both the trade deficit and the
income account deficit, which were only partly offset by sizeable increases in
the surpluses of the current transfers balance and the services balance.
The €2,081 million rise in the overall trade deficit is attributable to
increases of €1,203 million, €541 million and €337 million in the net oil import
bill, the trade deficit excluding oil and ships, and net payments for purchases
of ships, respectively. Regarding in particular the trade balance excluding oil
and ships, export receipts grew by €419 million or 11%, while the corresponding
import bill rose by €960 million or 7.8%.
The surplus of the services balance expanded by €366 million, exclusively
because of higher net transport receipts. It should be noted that gross
transport receipts (mainly from merchant shipping) increased by 22.6%. By
contrast, travel receipts fell by €50 million year-on-year, as gross receipts (i.e.
travel expenditures in Greece by non-residents) rose by only €31 million (or
3.2%), while gross payments (i.e. travel expenditure abroad by residents)
increased by €81 million (or 10.6%). Moreover, net payments for other services
grew by €105 million.
The income account deficit rose by €455 million, almost exclusively as a
result of higher net interest, dividend and profit payments. This development is
mainly associated with a rise in non-residents' public debt holdings.
Finally, the large increase of €1,478 million in the surplus of the current
transfers balance is attributable mainly to a rise in EU transfers to general
government and secondarily to a decline in general government payments to the EU.
Capital transfers balance
In April 2008, the capital transfers balance showed a surplus of €378
million, compared with €355 million in April 2007. (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 2008 period, the capital transfers balance
showed a surplus of €1,794 million (down €478 million year-on-year). This
reflects a decline in EU capital transfers to general government. Thus, the
overall transfers balance (current transfers plus capital transfers) recorded a
surplus of €3,766 million, compared with €2,766 million in 2007.
Combined current account and capital transfers balance (according to
the old method of presentation)
The combined current account and capital transfers balance (according to the
old method of presentation) showed a deficit of €3,081 million in April 2008,
compared with a deficit of €2,784 million in the corresponding month of 2007. In
the January-April 2008 period, this deficit came to €11,059 million, compared
with €9,888 million in the corresponding period of 2007.
Financial account balance
In April 2008, residents' direct investment abroad came to €372
million. The most important investment concerned an outflow of €260 million by
the Economou Group for the partial acquisition of the Norwegian firm OCEAN RIG
ASA. Non-residents' direct investment in Greece showed a small inflow of €23
million, concerning mainly loans between parent and subsidiary companies. Under
portfolio investment, a net outflow of €5,540 million was recorded, attributable
mainly to residents' purchases of foreign bonds (worth €4.1 billion) and
secondarily to non-residents' sales of Greek government bonds and shares of
Greek firms (of €0.7 and €0.3 billion, respectively). "Other" investment
recorded a considerable net inflow of €9,001 million, mainly resulting from a
large increase in non-resident credit institutions' deposit and repo holdings in
Greece, as well as a small decline in resident credit institutions' corresponding holdings abroad.
In the January-April 2008 period, direct investment showed a net
outflow of €813 million. Specifically, net inflows of non-residents' funds for
direct investment in Greece came to only €63 million, while net outflows of
residents' funds for direct investment abroad reached €876 million. During the
same period, a net inflow of €3,786 million was recorded under portfolio
investment. Specifically, the inflows due to non-residents' purchases of Greek
government bonds and Treasury bills (of €8.7 billion) and residents' sales of
foreign shares (of €0.9 billion) more than offset the outflows due to residents' purchases of foreign bonds and non-residents' sales of shares of Greek firms (worth
€4.2 billion and €0.8 billion, respectively). Finally, under "other" investment,
a net inflow of €8,441 million is attributable to the fact that the inflows of
non-residents' funds for investment in deposits and repos in Greece were
considerably higher than the increase in residents' corresponding deposits
At end-April 2008, Greece's reserve assets stood at €2.4 billion. (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. Conversely,
reserve assets do not include claims in euro on residents of non-euro area
countries, claims in foreign currency and in euro on residents of euro area
countries, and the Bank of Greece participation in the capital and the reserve
assets of the ECB.)
Note: Balance of payments data for May 2008 will be released on 22