Greek current account deficit up in Jan-Feb, Bank of Greece reports

The Greek current account deficit widened by 79 million euros in the January-February period, totaling 2.2 billion euros, as the improved services’ balance and primary income account only partly offset the deterioration of the balance of goods and the secondary income account, the Bank of Greece said in a report.

The central bank, in its monthly report, said that the deficit of the balance of goods grew, owing to a worsening of the non-oil balance of goods, while the oil balance improved slightly. Exports of goods rose by 3.9 pct at current prices, although they fell marginally (-0.1 pct) at constant prices; specifically, non-oil exports rose faster than total exports of goods, by 7.7 pct at current prices (9.2 pct at constant prices). Imports of goods rose by 5.4 pct at current prices (4.1 pct at constant prices).

The surplus of the services balance increased, primarily as a result of an improvement in the transport balance and, secondarily, in the travel balance. Sea transport receipts rose by 11.5 pct. At the same time, non-residents’ arrivals and relevant receipts rose by 7 pct and 41.1 pct, respectively. Lastly, an improvement of the primary income account is attributable to lower net payments for interest, dividend and profits, while the worsening of the secondary income account was a result of a deterioration in the general government account.

In the January-February period, under direct investment, an increase of 497 million euros was recorded in residents’ external liabilities (non-residents’ direct investment in Greece).

Under portfolio investment, a decrease in residents’ external assets is chiefly attributable to a decline of 1.6 billion euros in residents’ holdings of foreign bonds and Treasury bills. An increase in residents’ external liabilities is mainly due to a rise of 3.2 billion in non-residents’ holdings of Greek government bonds and Treasury bills. Under other investment, a decrease in residents’ external assets mainly reflects a decline of 1.1 billion in residents’ (credit institutions, institutional investors and corporations) deposit and repo holdings abroad. A decline in external liabilities is primarily attributable to a drop of 4.9 billion euros in non-residents’ deposit and repo holdings in Greece (the TARGET account included).

At the end of February 2019, Greece’s foreign reserve assets stood at 6.5 billion euros, almost at the same level as in February 2018.