Balance of payments JANUARY 2004
18/03/2004 - Press Releases
Current account balance
In January 2004, the current account deficit remained
virtually the same year-on-year. The drop in the trade deficit and the rise in
the services surplus were fully offset by the decrease in the transfers surplus,
while the income account deficit was almost unchanged.
Specifically, the trade deficit narrowed by €173 million in
comparison with January 2003, due to a considerable fall in the net oil import
bill. By contrast, the non-oil trade deficit grew slightly, because the increase
in export receipts was more than offset by the rise in import payments. The
increase in the services surplus stemmed from the growth of net transport
receipts, while net travel receipts remained virtually unchanged. It should be
stressed that the 2004 travel receipts and payments data are comparable
with the 2003 data and are derived from a border survey. Finally, the narrowing
of the transfers surplus reflects almost exclusively a drop in net EU transfers
to general government.
Financial account balance
In January 2004, a substantial inflow of non-residents'
funds (of €426 million) was observed under direct investment, associated with
the ongoing procedure of acquisition of PANAFON S.A. by VODAFONE. Under
portfolio investment, a net outflow of €560 million was recorded. This mainly
reflects the fact that outflows of funds due to increased residents' investment
in securities issued by non-residents outweighed inflows of funds associated
with increased non-residents' investment in Greek government bonds and Treasury
bills. Finally, as regards "other investment", a net inflow of €616
million was mainly connected with the substantial inflow of non-residents' funds
for deposits and repos in Greece, which more than offset the rise in resident
credit institutions' and institutional investors' deposits and repo holdings
abroad, as well as the drop in residents' (mainly non-government sector)
borrowing from non-residents.
At end-January 2004, Greece's reserve assets came to
€4.1 billion. It should be noted that, as early as in the first months of the
previous year (2003), the Bank of Greece diversified the composition of its
reserve asset portfolio, by reducing its holdings of non-euro area currencies (mainly
US dollars) and increasing its asset items that either offer higher yields or
are denominated in euro (mainly bonds issued by euro area Member States, which
are not included in the reserve assets). Since the need to maintain a high level
o reserve assets has been reduced, the Bank of Greece in this way improved the
return on its investments and reduced the risk of losses stemming from the
continuing fall of the US dollar and the appreciation of the domestic currency,
i.e. the euro. (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 February 2004 will
be released on 20 April 2004.