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Balance of payments: June 2017

21/08/2017 - Press Releases

Current account

In June 2017, the current account of the balance of payments showed a surplus of €842 million, which was lower by €68 million than one year earlier primarily because the primary and secondary income accounts turned to deficits from surpluses in June 2016 and, secondarily, due to the increase in the deficit of the balance of goods. These developments were, to a large extent, offset by a rise in the surplus of the services balance. The overall balance of goods and services recorded a surplus of €884 million, which was €198 million higher year-on-year.

The small year-on-year rise of €24 million in the goods deficit is attributable to the higher deficit of the oil balance, while the non-oil balance of goods improved as exports rose more than imports. It should be noted that non-oil exports of goods rose by 11.4% and oil exports by 9.6% at constant prices.

The rise in the surplus of the services balance by €221 million is solely attributable to an increase of €257 million in the surplus of the travel balance, as in June 2017 non-residents' arrivals and the corresponding receipts rose by 13% and 14.2%, respectively, year-on-year. By contrast, the surpluses of the transport balance and the other services balance declined, although sea transport receipts increased by 8.6%.

The deterioration in the primary income account was mainly due to lower net receipts under other primary income, while that in the secondary income account resulted primarily from a deterioration in the general government component.

In the first half of 2017, the current account deficit did not show a significant change year-on-year and stood at €2.8 billion. This development reflects improvements in the services balance and in the primary and the secondary income accounts, which offset an increase in the goods deficit. The overall balance of goods and services showed a deficit of €3.9 billion, up by €149 million year-on-year, as a rise in exports was more than offset by an increase in imports.

The widening of the goods deficit in the first half of 2017 relative to the corresponding period of 2016 resulted mainly from an increase in the oil deficit. The non-oil goods deficit also grew, as imports increased faster than exports. Regarding exports, it should be noted that non-oil exports of goods rose by 6.9% and oil exports by 8.3% at constant prices.

An increase of €754 million in the surplus of the services balance is the result of improvements in all its main components, most importantly in the transport balance. Compared with the first half of 2016, non-residents' arrivals increased by 6.6% and the corresponding receipts by 7.1%. Moreover, sea transport receipts rose by 21.0%.

Capital account

In June 2017, the capital account showed a surplus of €110 million, compared with a deficit in the same month of 2016, reflecting an improvement in the general government component, while in the first half of 2017 it recorded a surplus of €344 million, compared with a surplus of €645 million in the same period of 2016.

Combined current and capital account

In June 2017, the combined current and capital account (corresponding to the economy's external financing requirements) showed a surplus of €952 million, up by €67 million year-on-year, while in the first half of 2017 it recorded a deficit of €2.5 billion, up by €305 million year-on-year.

Financial account

In June 2017, residents' external assets fell by €479 million. The most important transactions concerned the sale of 99.9% and 100% of National Bank of Greece's subsidiaries in Bulgaria, United Bulgarian Bank A.D. and Interlease E.A.D., respectively, to the Belgian KBC Bank NV. In June 2017 residents' external liabilities, which represent non-residents' direct investment in Greece, increased by €537 million. The most important transactions were the acquisition of 24% of the Independent Power Transmission Operator S.A. (IPTO) by State Grid Europe Ltd (United Kingdom) and the inflow received by TAP AG (Greece) from TAP AG (Switzerland).

Under portfolio investment, the net increase in residents' external assets is chiefly attributable to a rise of €1.6 billion in residents' holdings of foreign bonds and Treasury bills, while a small net increase was observed on the liability side.

Under other investment, a net decrease in residents' assets reflects mainly the statistical adjustment related to holdings of euro banknotes (down by €795 million). The net decrease in liabilities also reflects the statistical adjustment related to holdings of euro banknotes (down by €875 million), as well as the fall in the outstanding debt of the public and the private sector to non-residents.

In the first half of 2017, under direct investment, residents' external assets rose by €518 million and the corresponding liabilities grew by €2.1 billion.

Under portfolio investment, a net decrease in residents' external assets reflects mainly a drop of €705 million in residents' holdings of foreign bonds and Treasury bills, while a net decline in liabilities reflects chiefly a decrease of €682 million in non-residents' holdings of Greek government bonds and Treasury bills.

Under other investment, a net decrease in residents' assets reflects mostly a drop of €2.2 billion in residents' (credit institutions' and institutional investors') deposit and repo holdings abroad and the statistical adjustment related to holdings of euro banknotes (down by €3.0 billion). A net decline in liabilities reflects principally a fall of €3.1 billion in the outstanding debt of the public and the private sector to non-residents, which, together with the statistical adjustment related to holdings of euro banknotes (down by €3.0 billion), more than offset a rise in non-residents' deposit and repo holdings in Greece (up by €1.5 billion, the TARGET account included).

At end-June 2017, Greece’s reserve assets stood at €6.3 billion, compared with €6.9 billion at end-June 2016.
 

Notes: Balance of payments data for July 2017 will be released on 20 September 2017.

Related link: Balance of payments: June 2017 - Table

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