The Greek current account deficit fell by 3.0 billion euros in the January-February period this year compared with the corresponding period in 2022 to stand at 1.5 billion, the Bank of Greece said on Thursday.
More specifically, the central bank attributed this development chiefly to an improvement in the balance of goods as well as in the secondary income account, which was offset to a degree by a worsening in the primary income account and the services balance. A drop in the deficit of the balance of goods was accounted for by a larger increase in exports than in imports.
Exports grew by 25.1% at current prices (10.7% at constant prices) and imports increased marginally by 0.3% at current prices (-1.1% at constant prices). Specifically, non-oil exports and imports of goods grew by 11.9% and 0.8%, respectively, at current prices (0.3% and -3.5% at constant prices). A decrease in the services surplus was attributed to a deterioration in the transport balance, which was partly offset by an improvement in the travel and other services balances. Non-residents’ arrivals grew by 83.5% and the relevant receipts by 76.4% year-on-year. The surplus of the primary income account decreased year-on-year, as a result of higher net interest, dividend and profit payments, which were partly offset by an increase in net receipts from other primary income. The surplus of the secondary income account widened year-on-year, chiefly because the general government balance registered net receipts instead of net payments.
In February, a drop in the deficit of the balance of goods was a combined result of an increase in exports and a decline in imports. Exports grew by 20.2% at current prices (9.1% at constant prices) and imports fell by 4.6% at current prices (-3,3% at constant prices). Specifically, non-oil exports of goods increased by 6.7% at current prices (-3.3% at constant prices) and non-oil imports of goods dropped by 1.3% at current prices (-5.0% at constant prices). An increase in the surplus of the services balance was due to an improvement in the other services balance, as well as in the travel balance, while the transport balance deteriorated. Non-residents’ arrivals rose by 80.6% and the relevant receipts by 80.9% compared with February 2022. The primary income account surplus declined year-on-year, owing to higher net interest, dividend and profit payments. The secondary income account surplus registered a small increase compared with February 2022.
In February, the capital account surplus increased relative to February 2022 and stood at 275.3 million euros, mainly as a result of net receipts, instead of net payments, recorded in the other sectors of the economy excluding general government. In the first two months of 2023, the capital account registered a surplus of 1.7 billion, against a deficit in the same period of 2022, mainly owing to a rise in general government net receipts. The deficit of the combined current and capital account (corresponding to the economy’s external financing requirements) decreased and stood at 1.0 billion. In the January-February period, the combined current and capital account registered a surplus of 268.3 million, against a deficit in the same period of 2022. under direct investment, residents’ external assets increased by 84.1 million and residents’ external liabilities rose by 316.7 million, without any remarkable transactions.
Under portfolio investment, an increase in residents’ external assets was almost exclusively attributable to a rise of 2.6 billion in residents’ holdings of foreign bonds and Treasury bills. A drop in their liabilities was due to a decrease of 400.0 million in non-residents’ holdings of Greek bonds and Treasury bills, which was partly offset by a 102.0 million rise in non-residents’ Greek equity holdings.
Under other investment, an increase in residents’ external assets reflected a statistical adjustment (of 319.0 million) associated with the issuance of banknotes, which was partly offset by a decrease of 200.0 million in residents’ deposit and repo holdings abroad. An increase in their liabilities reflected chiefly a rise of 5.0 billion in non-residents’ deposit and repo holdings in Greece (the TARGET account included), as well as a 319.0 million statistical adjustment related to the issuance of banknotes, which were partly offset by a drop of 1.6 billion in loans extended by non-residents.
In the January-February 2023 period, under direct investment, residents’ external assets rose by 99 million and residents’ external liabilities, which represent non-residents’ direct investment in Greece, increased by 527.9 million.
Under portfolio investment, a rise in residents’ external assets was almost exclusively due to an increase of 3.1 billion in residents’ holdings of foreign bonds and Treasury bills. A rise in their liabilities was due to an increase of 1.1 billion in non-residents’ holdings of Greek bonds and Treasury bills and a 205.0 million rise in non-residents’ Greek equity holdings.
Under other investment, an increase in residents’ external assets reflected a statistical adjustment (of 486.0 million) associated with the issuance of banknotes, which was partly offset by a decrease of 287.9 million in loans extended to non-residents by domestic financial institutions and a decline of 170.0 million in residents’ deposit and repo holdings abroad. An increase in residents’ external liabilities reflected chiefly a rise of 599.0 million in non-residents’ deposit and repo holdings in Greece (the TARGET account included) and a 486.0 million statistical adjustment associated with the issuance of banknotes, which were partly offset by a decline of 152.1 million in the outstanding debt to non-residents.
At the end of February 2023, Greece’s reserve assets stood at 11.8 billion euros, compared with 13.0 billion at end-February 2022.
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