Balance of payments: JUNE 2003
18/08/2003 - Press Releases
Current account balance
In June 2003, the current account deficit grew by €258 million
year-on-year, reaching €724 million. This mainly stemmed from a widening of
the income account deficit and the trade deficit. These developments were partly
offset by small increases in the transfers and services surpluses.
Specifically, underlying the widening of the non-oil trade deficit was a rise
in non-oil export receipts, which was, however, more than offset by an increase
in the non-oil import bill. At the same time, the net oil import bill grew over
the same period in 2002. The income account deficit more than doubled
year-on-year, mainly owing to increased interest payments on Greek government
bonds. The small growth of the services surplus is mainly accounted for by a
rise in net transport receipts, while net travel receipts decreased slightly
(June figures on travel receipts and payments are comparable with those for June
2002; These figures are derived from a border survey).
Finally, the increase in the transfers surplus reflects a rise in general
government net receipts (mainly net transfers from the EU).
In the first half of 2003 the current account deficit rose by €863 million
over the same period in 2002 and reached €5,792 million. This reflects a
widening of the oil trade deficit and the income account deficit and a narrowing
of the transfers surplus. Over the same period, the non-oil trade deficit
decreased, while the services surplus grew.
The non-oil trade deficit declined by €421 million in the first half of
2003 as a result of a €293 million increase in export receipts and a €128
million drop in the import bill. At the same time, the net oil import bill rose
by €589 million. Over the same period, the services surplus grew, as the
decrease in net travel receipts was more than offset by an increase in net
transport receipts (the figures for travel receipts and payments that concern
the entire January-June period of the current year are not comparable with those
for the corresponding period of 2002, since the relevant border survey started
only in min-May 2002). The income account deficit widened by €385 million, mainly
owing to an increase in net payments for interest, dividends and profits, as
well as to a decline in net receipts from fees and wages. Finally, underlying
the narrowing (by €660 million) of the transfers surplus was a reduction in
transfers from the EU to general government. By contrast, net transfers to the
other sectors grew.
Financial account balance
In June 2003, direct investment showed a net inflow of €225 million, which
is associated with the purchase of shares (worth €326 million) of Hellenic
Petroleum S.A. (ΗELPE) by Paneuropean Oil (main shareholder of PETROLA) within
the context of the ΗELPE-PETROLA merger. Under portfolio investment, a net
inflow of €1,290 million was observed, mainly reflecting non-residents'
investment in Greek government bonds (worth €1,832 million). Finally, as
regards "other investment", a net outflow of €1,007 million was
recorded, connected mainly with an increase in residents' deposits and repo
holdings abroad, as well as to repayment of general government loans.
In the first half of 2003, a net outflow of €543million was observed under
direct investment. During the same period, a considerable net inflow of €11,428
million was recorded under portfolio investment. This development is connected
with a sizeable inflow of foreign investors' funds, mainly for the purchase of
Greek government bonds. It should be pointed out that the substantial outflows
for the purchase of bonds by residents are mainly accounted for by the purchase
by the Bank of Greece of euro-denominated bonds issued by euro area Member
States, reflecting the restructuring of the Bank's portfolio (with a
corresponding decrease in reserve assets). Finally, under ''other investment'',
a net outflow of €9,154 million was recorded. This is associated with a
considerable increase in residents' (mainly credit institutions) deposits and
repo holdings abroad, substantial general government loan repayments and a
decrease in deposits and repo holdings by non-residents.
At end-June 2003, Greece's reserve assets stood at €4.9 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 July 2003 will be released on September