Bank of Greece: Greek current account deficit slightly up in Q1

The Greek current account deficit was slightly higher in the first quarter of 2018 compared with the same period in 2017, the Bank of Greece said on Monday.

In a report, the central bank said that in the first quarter of 2018, the current account showed a deficit of 2.8 billion euros, up by 53 million year-on-year. This is attributable to a decline in the services surplus (mainly) and the secondary income account surplus. By contrast, the goods balance and the primary income account improved. The deficit of the balance of goods declined due to an improvement in the oil balance, as oil exports rose by 16.1 pct at current prices (11.2 pct at constant prices), while imports increased by only 3.0 pct (-12.1 pct at constant prices). As regards the non-oil balance of goods, the relevant exports rose by 14.4 pct (13.3 pct at constant prices), i.e. faster than the growth rate of the corresponding imports (8.7 pct and 8.6 pct at current and constant prices, respectively). Nevertheless, the rise in imports in absolute terms was stronger than the rise in exports, which resulted in a higher deficit. The decline in the services surplus is mainly attributable to a deterioration in the other services balance. The travel balance did not change considerably, despite an increase in non-residents’ arrivals and the corresponding receipts by 12.8 pct and 13.8 pct, respectively, due to a rise in related payments. The transport balance deteriorated slightly. Lastly, the surpluses in the primary and secondary income accounts showed a small increase and decrease, respectively.

In the first quarter of 2018, under direct investment, residents’ net external assets increased by 445 million euros and residents’ net external liabilities, which represent non-residents’ direct investment in Greece, rose by 845 million.

Under portfolio investment, a net decrease in residents’ external assets is chiefly attributable to a decline of 1.9 billion euros in residents’ holdings of foreign bonds and Treasury bills. A net increase in their liabilities is mainly due to a rise of 3.4 billion in non-residents’ holdings of Greek government bonds and Treasury bills. Under other investment, a net decrease in residents’ external assets mainly reflects the statistical adjustment related to holdings of euro banknotes. A net decline in liabilities reflects mainly a fall of 8.9 billion euros in non-residents’ deposit and repo holdings in Greece.

At the end of March 2018, Greece’s reserve assets stood at 6.6 billion euros, compared with 6.5 billion at end-March 2017.