Balance of payments: November 2014

20/01/2015 - Press Releases

Current account balance

In November 2014, the current account balance showed a deficit of €997 million, up by €244 million year-on-year. This development is mainly due to a decline in general government net current receipts from the EU; as a result, the current transfers balance showed a small deficit in November, compared with a surplus in the same month of 2013. At the same time, a slight increase was recorded in the trade deficit and in the income account deficit. These changes were offset to some extent by an improvement in the services balance.

The trade deficit grew marginally by €10 million year-on-year, owing to the higher net oil import bill, which was for the most part offset by lower net payments for purchases of ships, while the trade deficit excluding oil and ships did not show any change. It should be noted that receipts from exports of goods recorded a rise in November 2014 (against a decrease in the same month of 2013), owing to an increase in non-oil exports of goods, while oil export receipts dropped. The overall import bill also increased, due to the higher import bill for “other” goods and, to a lesser extent, oil, while the import bill for ships declined.

The surplus of the services balance widened by €128 million year-on-year, on account of improvements mainly in the transport (sea and air transport) and, secondarily, in the travel and “other” services balances. Travel receipts increased by 30.7%, reflecting a significant rise of 53.9% in non-residents’ arrivals. This increase in receipts was partly offset by a rise in travel spending by residents abroad.

In the January-November 2014 period, the current account balance showed a surplus of €2.5 billion, compared with €1.3 billion over the same period of 2013. In addition, the overall balance of goods and services recorded a surplus of €2.3 billion, compared with €436 million in 2013. This development is attributable to the improved services balance. It should be noted that, over the January-November 2014 period, total exports of goods and services rose by 8.4% (compared with 2.4% over the same period of 2013). In more detail, receipts from exports of goods increased by 4.7%, while receipts from services rose by 11.3%.

The trade deficit grew by €918 million, mainly on account of higher net payments for purchases of ships. The net oil import bill recorded only a slight increase, as did the trade deficit excluding oil and ships.

The €2.8 billion rise in the surplus of the services balance is due to higher net receipts from travel, transport and “other” services. Specifically, travel spending by non-residents in Greece grew by 10.8% year-on-year, reflecting a 22.7% rise in non-residents’ arrivals.
Moreover, in the January-November 2014 period, the income account deficit fell by €366 million, mainly as a result of lower net interest payments. Finally, the current transfers surplus contracted by €1.1 billion year-on-year, chiefly as a result of lower general government transfer receipts from the EU, and stood at €2.8 billion.

Capital transfers balance

In November 2014, the capital transfers balance showed a surplus of €486 million, which was more than double the surplus recorded in November 2013. In the January-November 2014 period, the surplus of the capital transfers balance came to €2.3 billion, compared with €3.0 billion over the same period of 2013.

The overall transfers balance (current transfers plus capital transfers) recorded a surplus of €5.1 billion in the January-November 2014 period, compared with €6.9 billion over the corresponding period of 2013.

Combined current account and capital transfers balance

In the January-November 2014 period, the combined current account and capital transfers balance (corresponding to the economy’s external financing requirements) showed a surplus of €4.8 billion, against €4.3 billion in the same period of 2013.

Financial account balance

In November 2014, no remarkable transactions were recorded under residents’ direct investment abroad. Non-residents’ direct investment in Greece increased by €132 million, mainly due to the acquisition of 25% of the shares of Costa Navarino by Fivedunes Limited based in Cyprus (owned by Olayan Group).

Portfolio investment recorded a net outflow of €2.5 billion, chiefly on account of, on the one hand, a decrease (outflow of €1.1 billion) in non-residents’ holdings of Greek government bonds and Treasury bills and, on the other hand, a corresponding increase (of €1.4 billion) in residents’ investment in foreign bonds and Treasury bills.

Under “other” investment, a net inflow of €2.8 billion was recorded, mainly due to a net increase (of €4.2 billion) in non-residents’ deposit and repo holdings in Greece, which was partly offset by residents’ loan repayments amounting to €1 billion.

In the January-November 2014 period, non-residents’ direct investment in Greece showed a net inflow of €1.4 billion, while residents’ direct investment abroad showed a net outflow of €515 million.

Under portfolio investment, a net outflow of €6.0 billion was recorded, as the net outflow (€8.2 billion) for residents’ investment abroad was partly offset by a rise in liabilities (€2.2 billion). The latter was mainly the result of a rise in non-residents’ investment in shares of Greek firms (€8 billion), which was largely offset by a decrease in non-residents’ holdings of Greek government bonds and Treasury bills (€5.9 billion).

Under “other” investment, a net inflow of €2.3 billion reflects primarily a €2 billion decline in residents’ assets, which was partly offset by a €736 million increase in liabilities. The small increase in liabilities is mainly attributable to the fact that the net increase in the outstanding debt of the public and the private sector to non-residents (inflow of €6.7 billion) was almost offset by a drop in non-residents’ deposit and repo holdings in Greece (outflow of €5.9 billion).

At end-November 2014, Greece’s reserve assets stood at €4.9 billion, compared with €4.3 billion at end-November 2013.

Note: Balance of payments data for December 2014 will be released on 20 February 2015.