Greece’s current account deficit fell by 431.3 million euros year-on-year to stand at 1.6 billion, the Bank of Greece said on Friday. The central bank, in a monthly report, said that a reduction in the goods deficit is accounted for by a larger drop in imports than exports in absolute terms. Exports dropped by 15.9% at current prices (-4.6% at constant prices) and imports fell by 12.8% at current prices (-2.9% at constant prices). More specifically, non-oil exports of goods edged up by 0.7% at current prices (-1.9% at constant prices), whereas non-oil imports of goods dropped by 4.0% (-5.0% at constant prices).
An increase in the services’ surplus is due to an improvement in the balance of travel services, while the transport balance, and to a lesser extent the other services balance, deteriorated. Non-residents’ arrivals rose by 13.9% and the relevant receipts increased by 24.8% compared with May 2022. The primary income account registered a deficit, against a surplus in May 2022, largely on the back of higher interest, dividend and profit payments. The surplus of the secondary income account decreased compared with May 2022, reflecting mainly a fall in general government net receipts.
In the January-May 2023 period, the current account deficit decreased by 3.5 billion euros year-on-year to stand at 7.2 billion. A reduction in the goods deficit is a combined result of an increase in exports and a decrease in imports. Exports grew by 5.5% at current prices (5.5% at constant prices), whereas imports fell by 4.5% (-0.9% at constant prices). Specifically, non-oil exports of goods rose by 6.7% at current prices, while the corresponding imports decreased slightly by 1.2% (-0.2% and -4.1% at constant prices, respectively).
An increase in the services surplus is attributed primarily to an improvement in the balance of travel services and, to a lesser extent, to an improvement in the other services balance, partly offset by a deterioration in the transport balance. Non-residents’ arrivals grew by 32.9% and the relevant receipts increased by 30.7% year-on-year. The surplus of the primary income account decreased in comparison with the corresponding period of 2022, reflecting an increase in net interest, dividend and profit payments, partly offset by an increase in net receipts from other primary income. The surplus of the secondary income account increased relative to the same period of 2022, mainly because net receipts were recorded in the general government balance instead of net payments.
The capital account showed a small deficit of 5.6 million, against a surplus in May 2022, mainly due to a decrease in general government net receipts. In the five-month period of January-May, the capital account surplus increased year-on-year and amounted to 1.9 billion, mainly due to the recording of net receipts, instead of net payments, in the οther sectors than general government balance and, to a lesser extent, due to an increase in general government net receipts.
In May, under direct investment, residents’ external assets increased by 338.5 million and residents’ external liabilities rose by 500.5 million, without any remarkable transactions. Under portfolio investment, an increase in residents’ external assets is mainly due to a rise of 1.9 billion in residents’ holdings of foreign bonds and Treasury bills.
In January-May, under direct investment, residents’ external assets increased by 703.4 million and residents’ external liabilities, which represent non-residents’ direct investment in Greece, rose by 1.6 billion. Under portfolio investment, a rise in residents’ external assets is almost exclusively due to an increase of 4.2 billion in residents’ holdings of foreign bonds and Treasury bills. An increase in their liabilities is mainly due to a rise of 2.4 billion in non-residents’ holdings of Greek bonds and Treasury bills.
At the end of May, Greece’s reserve assets stood at 12.5 billion euros, compared with 10.8 billion at end-May 2022.
SOURCE; ANA-MPA
