Bank of Greece: Travel receipts accounted for 50% of 2019 levels in Jan-Aug

Travel receipts recovered significantly in the January-August period this year rising 135.7% in comparison with the same period in 2020, accounting for 50% of 2019 receipts, while non-residents’ arrivals grew by 79.2% in the eight-month period, the Bank of Greece said on Thursday.

The central bank, in a monthly report, said that these positive developments in the tourism sector contributed to reducing the country’s current account deficit by 2.5 billion euros, to 5.4 billion euros.

A rise in the deficit of the balance of goods was due to the fact that imports increased more than exports in absolute terms. In more detail, exports grew by 30.3% and 13.5% at current and constant prices, respectively, while imports rose by 27.2% at current prices and by 9.2% at constant prices. Specifically, non‑oil exports and imports of goods grew almost at the same rate (around 24%) at current prices; at constant prices they increased by 19.7% and 22.8%, respectively. In the same period, under direct investment, residents’ external assets increased by 746 million and residents’ external liabilities, which represent non‑residents’ direct investment in Greece, rose by 3.5 billion. Under portfolio investment, an increase in residents’ external assets is chiefly attributable to a rise of 16.8 billion in residents’ holdings of foreign bonds and Treasury bills. An increase in residents’ external liabilities is due to a rise of 1.3 billion in non‑residents’ holdings of shares of Greek firms and an increase of 684 million in non‑residents’ holdings of Greek government bonds and Treasury bills. Under other investment, a rise in residents’ external assets reflects an increase of 2.8 billion in loans extended to non‑residents, which was partly offset by a decrease of 1.3 billion in residents’ deposit and repo holdings abroad. An increase in their liabilities represents mainly a rise of 16.4 billion in non‑residents’ deposit and repo holdings in Greece (the TARGET account included).

At the end of August, Greece’s reserve assets stood at 12.1 billion, recording an increase of around 2.6 billion compared with end‑August 2020, mainly due to the IMF’s new SDR allocation.

In August, the current account registered a surplus of 1.4 billion euros, against a 151 million deficit in August 2020. The rise in the deficit of the balance of goods is accounted for by a larger increase in imports than in exports. Exports increased by 36.1% and 11.9% at current and constant prices, respectively, while imports rose by 40.7% and 18.6% at current and constant prices, respectively. In particular, non‑oil exports of goods grew by 29.5% and 21.9% at current and constant prices, respectively, and non‑oil imports of goods increased by 32.6% and 28.5% at current and constant prices, respectively. The surplus of the services balance grew, reflecting an improvement of mainly the travel balance and, to a lesser extent, of the transport balance. Non‑residents’ arrivals and relevant receipts registered a remarkable increase (at about the same pace: 125%). More specifically, receipts turned out at 75.8% of their level in August 2019. The surplus of the transport balance grew mainly on the back of an improvement in the surplus of the sea transport balance. Lastly, the deficit of the other services balance increased.