Balance of payments: MAY 2008
22/07/2008 - Press Releases
Current account balance
In May 2008, the current account deficit grew by
€1,183 million year-on-year, to reach €3,293 million, as a result mainly of an
increase in the trade deficit and, secondarily, a widening of the income account
deficit and a decline in the surplus of the current transfers balance, while the
surplus of the services balance remained almost unchanged.
The year-on-year rise of €812 million in the overall trade
deficit is almost equally attributable to increases of €450 million and €413
million in the trade deficit excluding oil and ships and the net oil import bill
respectively, while net payments for purchases of ships decreased by €50
Despite increases in net travel and transport receipts (up
€88 million and €33 million respectively), the surplus of the services balance
remained almost unchanged, as net payments for other services grew (by €127
The €299 million rise in the income account deficit is almost
equally attributable to increases in net payments for interest and net payments
for dividends and profits.
The surplus of the current transfers balance shrank by €66
million year-on-year, mainly because the net receipts of the other sectors
(excluding general government) decreased by €55 million. Net EU transfers to
general government dropped only slightly (by €11 million). (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-May 2008, the current account deficit rose
by €1,907 million over the same period of 2007 and reached €16,178 million. This
development reflects large increases in both the trade deficit and the income
account deficit, which were only partly offset by a large rise in the surplus of
the current transfers balance and a sizeable increase in the surplus of the
The €2,894 million rise in the overall trade deficit is
attributable to increases of €1,616 million, €991 million and €286 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 €447 million or 9.1%,
while the corresponding import bill rose by €1,438 million or 9.3%.
The surplus of the services balance expanded by €328 million,
reflecting exclusively higher net transport receipts. It should be noted that
gross transport receipts (mainly from merchant shipping) increased by 21.3%. Net
travel receipts did not change considerably year-on-year, as gross receipts
(i.e. travel spending in Greece by non-residents) rose by €157 million (or
8.2%), while gross payments (i.e. travel spending abroad by residents of Greece)
increased by €151 million (or 16.0%). Besides, net payments for other services
grew by €232 million.
The income account deficit rose by €754 million, exclusively
as a result of higher net interest, dividend and profit payments. This
development is largely associated with a rise in non-residents' holdings of
Greek public debt.
Finally, the large increase of €1,413 million in the surplus
of the current transfers balance is attributable to, mainly, a substantial rise
in EU transfers to general government and, secondarily, a decline in general
government payments to the EU.
Capital transfers balance
In May 2008, the capital transfers balance showed a
surplus of €314 million, compared with just €4 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
In the January-May 2008 period, the capital transfers
balance showed a surplus of €2,108 million (down €168 million year-on-year).
This reflects a decline in EU capital transfers to general government. However,
the overall transfers balance (current transfers plus capital transfers)
recorded a surplus of €4,206 million, up €1,244 million in comparison with the
corresponding period of 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 €2,979 million
in May 2008, compared with a deficit of €2,106 million in the corresponding
month of 2007. In the January-May 2008 period, this deficit came to €14,070
million, compared with €11,994 million in the corresponding period of 2007.
Financial account balance
In May 2008, residents' direct investment abroad came
to €158 million. The most important investment concerned an outflow of €49
million for the participation of ALPHA BANK in the share capital increase of its
subsidiary in Serbia ALPHA BANK SRBJIA A.D. Non-residents' direct investment in
Greece showed a considerable inflow of €2,642 million, of which €2,548 million
concerned the acquisition of 19.99% of the share capital of the Hellenic
Telecommunications Organisation (OTE) by the German company DEUTSCHE TELEKOM.
Under portfolio investment, a net outflow of €5,370 million
was recorded, attributable to, chiefly, residents' purchases of foreign bonds
and Treasury bills (worth €4.8 billion). "Other" investment recorded a
considerable net inflow of €6,012 million, mainly resulting from a large
increase in non-resident credit institutions' deposit and repo holdings in
Greece, which exceeded by far the rise in Greek credit institutions'
corresponding investment abroad.
In the January-May 2008 period, direct investment
showed a net inflow of €1,670 million. Specifically, net inflows of
non-residents' funds for direct investment in Greece came to €2,704 million,
while net outflows of residents' funds for direct investment abroad reached
€1,034 million. During the same period, a net outflow of €1,584 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) was more than offset by outflows due to non-residents' sales of shares
of Greek firms (worth €1.1 billion) and residents' purchases of foreign bonds
and Treasury bills (worth €9.5 billion). Finally, under "other" investment, a
net inflow of €14,453 million is attributable to the fact that the inflows of
non-residents' funds for investment in deposits and repos in Greece were more
than double the increase in residents' corresponding deposits abroad.
At end-May 2008, Greece's reserve assets reached €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 June 2008 will be
released on 19 August 2008.