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Balance of payments: January 2013

21/03/2013 - Press Releases

Current account balance

In January 2013, the current account balance showed a deficit of €222 million, down by €1.2 billion (or 84.7%) year-on-year. This development is mainly due to declines in the trade deficit and the income account deficit.

The trade deficit narrowed by €689 million, as a result of decreases in all of its components. The net import bill for oil and ships fell by €299 and €18 million, respectively, and the trade deficit excluding oil and ships declined by €372 million, owing to higher export receipts (up by €128 million or 11.4%) and, concurrently, to the reduced import bill (down by €244 million or 11.4%).

The services surplus remained broadly unchanged (+0.2%), as slight improvements in the travel balance and the “other” services balance were almost offset by lower net transport receipts. More specifically, travel spending in Greece by non-residents declined by a mere €6 million, while travel spending abroad by residents fell by €60 million; as a result, the travel balance showed a small surplus in January 2013, against a deficit in January 2012. Net transport receipts fell by €67 million, mainly on account of lower net receipts from “other transport services”.

The income account deficit shrank by €412 million, primarily on account of lower net interest, dividend and profit payments. In particular, mainly as a result of the PSI, in January 2013 net interest receipts of €28 million were recorded, against net interest payments of €411 million on Greek government bonds/Treasury bills held by non-residents in January 2012.

Finally, the current transfers balance showed a higher surplus (by €124 million) year-on-year, reflecting “other” sectors’ net transfer receipts of €190 million (against net payments of €85 million in January 2012), partly as a result of receipts from the reallocation of ECB monetary income for the years 2008-2010 (€132 million), while net general government receipts (mainly from the EU) declined by €151 million. (It should be recalled that gross current transfers from the EU mainly include receipts from the European Agricultural Guidance and Guarantee Fund (EAGGF), as well as receipts from the European Social Fund, while current transfers to the EU include Greece’s contributions (payments) to the Community Budget.)

 

Capital transfers balance

In January 2013, the capital transfers balance showed a deficit of €9 million, well below the 2012 deficit, exclusively reflecting a decline in the net transfer payments of the “other” (excluding general government) sectors. (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.)

Finally, the overall transfers balance (current transfers plus capital transfers) recorded a surplus of €897 million, up by €139 million year-on-year.

Combined current account and capital transfers balance

In January 2013, the combined current and capital transfers balance (corresponding to the economy’s external financing requirements) showed a deficit of €231 million, compared with €1.5 billion in January 2012 (down by 84.3%).

Financial account balance

In January 2013, non-residents’ direct investment in Greece showed a net inflow of €556 million (against a net outflow of €156 million in the same month of 2012). The most significant transaction concerns an inflow of €585 million for the participation of the parent company Crédit Agricole (France) in the capital increase of its subsidiary, Emporiki Bank. Residents’ direct investment abroad recorded a net outflow of €24 million (compared with a net outflow of €46 million in January 2012), without any remarkable transaction.

Under portfolio investment, a net inflow of €882 million was recorded (compared with a net outflow of €82 million in January 2012). This is mainly attributable to a capital inflow on account of a €1.1 billion decline in residents’ holdings of foreign bonds. There was also a €206 million and €150 million rise in non-residents’ investment in Greek bonds and financial derivatives, respectively (inflow). These developments were partly offset by a €355 million outflow due to an increase in residents’ holdings of foreign Treasury bills, as well as by a €306 million outflow owing to a decline in non-residents’ holdings of Greek Treasury bills.

As regards “other” investment, a net outflow of €1.4 billion was recorded (against a net inflow of €2.2 billion in January 2012), which is mainly attributable to a €12.2 billion decline in non-residents’ deposit and repo holdings in Greece (including the TARGET account). These developments were offset by an inflow attributable to an increase of €4.7 billion in the net outstanding debt of the public and the private sector to non-residents, which mainly reflects public sector net borrowing of €5,233 million from the EFSF and the IMF. Also, a €6.1 billion net inflow was recorded as a result of a decline in resident credit institutions’ and institutional investors’ deposit and repo holdings abroad.

At end-January 2013, Greece’s reserve assets stood at €5.4 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 non-euro area residents. 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 February 2013 will be released on 22 April 2013.

Related link: Balance of payments: January 2013 - Table

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