Balance of Payments: October 2023
21/12/2023 - Press Releases
- In October 2023, the current account deficit decreased significantly year-on-year, mainly due to an improvement in the balance of goods and, to a lesser extent, in the balance of services, while the primary and secondary income accounts deteriorated.
- In the January-October 2023 period, the current account deficit decreased year-on-year, owing to an improvement in the balance of goods, the balance of services and the secondary income account, which was offset to a degree by a worsening of the primary income account.
Current account
In October 2023, the current account deficit almost halved year-on-year and stood at €1.4 billion.
A decline in the deficit of the balance of goods is accounted for by a larger drop in imports than in exports. Exports declined by 8.7% at current prices (‑3.9% at constant prices) and imports fell by 17.2% at current prices (‑6.1% at constant prices). More specifically, non-oil exports of goods declined by 5.8% at current prices (‑7.6% at constant prices), whereas non-oil imports of goods also declined by 3.4% at current prices (‑3.1% at constant prices).
An increase in the surplus of the services balance is mainly due to an improvement of the travel balance and, to a lesser extent, the transport and other services balances. Non-residents’ arrivals rose by 14.0% and the relevant receipts by 10.2% year-on-year.
The primary income account deficit grew year-on-year, owing mainly to higher net interest, dividend and profit payments. The deficit of the secondary income account widened compared with October 2022, due to higher general government net payments.
In the January-October 2023 period, the current account deficit decreased by €5.9 billion year-on-year to stand at €8.7 billion.
A decline in the deficit of the balance of goods is accounted for by a larger drop in imports than in exports. Exports fell by 6.5% at current prices (‑2.4% at constant prices), whereas imports declined by 11.5% at current prices (‑4,0% at constant prices). Specifically, at current prices non-oil exports of goods dropped marginally by 0.4%, while the corresponding imports decreased by 2.4% (‑4.7% and ‑4.0% at constant prices, respectively).
An increase in the services surplus is attributed to an improvement, primarily, in the travel balance and, secondarily, in the other services balance, which was partly offset by a deterioration in the transport balance. Non-residents’ arrivals grew by 17.0% and the relevant receipts increased by 14.7% year-on-year.
The primary income account deficit deteriorated year-on-year, due to an increase in net interest, dividend and profit payments, which was partly offset by a rise in net receipts from other primary income. The secondary income account recorded a surplus, against a deficit in the corresponding period of 2022, chiefly owing to a shift from net payments to net receipts in the general government sector and, to a lesser extent, to higher net receipts in the other sectors of the economy excluding general government.
Capital account
In October 2023, the capital account showed a deficit, against a surplus in October 2022, and stood at €29.6 million, owing mainly to net payments, instead of net receipts, recorded in the other sectors of the economy excluding general government.
In the January-October 2023 period, the capital account surplus declined year-on-year and stood at €2.0 billion, primarily as a result of lower net receipts in the other sectors of the economy excluding general government.
Combined current and capital account
In October 2023, the deficit of the combined current and capital account (corresponding to the economy’s external financing requirements) decreased to stand at €1.5 billion.
In the January-October 2023 period, the deficit of the combined current and capital account declined significantly year-on-year and amounted to €6.7 billion.
Financial account
In October 2023, under direct investment, residents’ external assets increased by €1.9 billion, the main transaction being the acquisition of Enel Romania by Public Power Corporation (PPC) S.A. At the same time, residents’ external liabilities rose by €256.4 million, without any remarkable transactions.
Under portfolio investment, a decrease in residents’ external assets is almost exclusively due to a decline of €2.2 billion in their holdings of foreign bonds and Treasury bills. A small increase in residents' external liabilities is due to a rise of €222.0 million in non-residents' holdings of shares of Greek firms, which was largely offset by a decrease of €207,0 million in non-residents' holdings of Greek bonds and Treasury bills.
Under other investment, residents’ external assets dropped due to a decline of €1.6 billion in residents’ deposit and repo holdings abroad, which was partly offset by a €514.0 million statistical adjustment associated with the issuance of banknotes. A drop in their liabilities mainly reflects a decrease of €451.0 million in non-residents' deposit and repo holdings in Greece (the TARGET account included) and, secondarily, a decline of €287.8 million in the outstanding debt to non-residents, which were offset to a degree by a €514.0 million statistical adjustment related to the issuance of banknotes.
In the January-October 2023 period, under direct investment, residents’ external assets increased by €2.8 billion and residents’ external liabilities, which represent non-residents' direct investment in Greece, rose by €4.1 billion.
Under portfolio investment, a rise in residents’ external assets is almost exclusively due to an increase of €4.7 billion in residents’ holdings of foreign bonds and Treasury bills. An increase in external liabilities is mainly attributable to a rise of €4.1 billion in non-residents’ holdings of Greek bonds and Treasury bills, which was partly offset by a €137.0 million drop in their holdings of Greek equities.
Under other investment, a drop in residents’ external assets is due to a decline of €6.5 billion in residents’ deposit and repo holdings abroad, which was partly offset by a €4.2 billion statistical adjustment associated with the issuance of banknotes and, to a lesser extent, by a €429.7 million rise in loans extended to non-residents by domestic financial institutions. An increase in residents’ external liabilities is associated with a €4.2 billion statistical adjustment with regard to the issuance of banknotes, which was partly offset by a decline of €1.6 billion in the outstanding debt to non-residents and, to a lesser extent, by a drop of €838.0 million in non-residents’ deposit and repo holdings in Greece (the TARGET account included).
At end-October 2023, Greece’s reserve assets stood at €12.3 billion, compared with €11.1 billion at end-October 2022.
Note: Balance of payments statistics for November 2023 will be released on 19 January 2024.