The Bank of Greece (BoG) on Thursday announced figures for the country’s current account balance, with a relevant deficit nearly doubling on a year-on-year basis, reaching 624 million euros in Oct. 2017.
The full statement reads:
In October 2017, the current account showed a deficit of €624 million, up by €356 million year-on-year, as a result of increases, primarily, in the deficit of the balance of goods and, secondarily, in the deficits of the primary and secondary income accounts, which more than offset a rise in the surplus of the services balance.
The widening in the deficit of the balance of goods is mainly attributable to a rise in imports of oil and other goods, which more than offset an increase in exports. It should be noted, however, that exports of goods rose by 9.0% at current prices and by 3.6% at constant prices. The rise in the surplus of the services balance is due mostly to an improvement in the travel balance, since non-residents’ arrivals and the corresponding receipts increased by 8.4% and 14.2%, respectively. The surplus of the transport balance grew solely on account of a 35% increase in net sea transport receipts.
In the January-October 2017 period, the current account showed a surplus of €712 million, up by €326 million year-on-year. This development reflects improvements mainly in the services balance and, to a lesser extent, the primary and the secondary income accounts, which more than offset an increase in the deficit of the balance of goods.
A widening in the deficit of the balance of goods is mostly a result of a rise in the oil deficit. It should be noted that exports of goods increased by 13.6% and 3.5% at current and constant prices, respectively, and that the corresponding growth rates for non-oil exports were 9.3% and 6.4%. A rise in the surplus of the services balance is attributable to an improvement in all of its main components. More specifically, as regards the travel balance, non-residents’ arrivals increased by 10.1% and the corresponding receipts by 10.6%. Moreover, transport receipts rose by 18.1% at current prices. Finally, the primary and secondary income accounts also improved.
Capital account
In October 2017, no significant changes were registered in the capital account, while in the January-October 2017 period a surplus of €362 million was recorded, compared with a surplus of €639 million in the same period of 2016.
Combined current and capital account
In October 2017, the combined current and capital account (corresponding to the economy’s external financing requirements) registered a deficit of €616 million, up by €375 million year-on-year, while in the January-October 2017 period it showed a surplus of €1.1 billion, up by €49 million year-on-year.
Financial account
In October 2017, under direct investment, no substantial transactions were recorded.
Under portfolio investment, a net decrease in residents’ external assets is chiefly attributable to a decline of €2.1 billion in residents’ holdings of foreign bonds and Treasury bills. A net increase in their liabilities is mainly due to a rise of €479 million in non-residents’ holdings of Greek government bonds and Treasury bills.
Under other investment, a decrease was recorded in residents’ assets and liabilities. The latter reflects to a large extent a fall of €4.1 billion in non-residents’ deposit and repo holdings in Greece (the TARGET account included). (1)
In the January-October 2017 period, under direct investment, residents’ external assets rose by €456 million and the corresponding liabilities by €3.1 billion.
Under portfolio investment, a net decrease in residents’ external assets reflects mainly a drop of €10.4 billion in residents’ holdings of foreign bonds and Treasury bills, while a net decline in liabilities reflects chiefly a decrease of €1.5 billion in non-residents’ holdings of Greek government bonds and Treasury bills.
Under other investment, a net decrease in residents’ assets partially reflects a decline of €1.7 billion in residents’ (credit institutions’ and institutional investors’) deposit and repo holdings abroad. A net decrease in liabilities largely reflects a drop of €20.3 billion in non-residents’ deposit and repo holdings in Greece (the TARGET account included), which more than offset an increase of €6.1 billion in the outstanding debt of the public and the private sector to non-residents. (2)
At end-October 2017, Greece’s reserve assets stood at €6.6 billion, compared with €6.7 billion in October 2016.
Note: Balance of payments statistics for November 2017 will be released on 22 January 2018.
(1) In October 2017, both assets and liabilities registered a decrease on account of the statistical adjustment related to holdings of euro banknotes, which came to €1.1 billion and €1.2 billion, respectively.
(2) In the January-October 2017 period, both assets and liabilities registered a decrease on account of the statistical adjustment related to holdings of euro banknotes, which came to €6.8 billion and €7.4 billion, respectively.
