Greek current account deficit down 97.6 pct in Jan-July

The central bank, in a report, said that the current account deficit fell to 155 million euros in the seven-month period, from 6.4 billion euros in 2012, a decline of 97.6 pct. The central bank attributed this development to a significant reduction in the

country’s trade deficit and to a increase in the surpluses of current account transfers and services.

In July 2013, the current account balance showed a surplus of 2.7 billion euros, up by 2.2 billion year-on-year. This development is mainly due to an inflow of 1.5 billion euros – representing the first installment of the income on the Securities Markets Programme (SMP) portfolio accruing to the ECB, payable to Greece. At the same time, the trade deficit contracted, while the services surplus rose. By contrast, the income account deficit recorded an increase.

The trade deficit fell by 207 million euros, on account of a 164 million decrease in the net oil import bill. The trade deficit excluding oil and ships recorded a slight decline of 16.5 million, as a result of higher export receipts (up by 135 million or 11.7 percent) and a higher import bill (up by 118 million or 6.4 pct). Finally, net payments for purchases of ships also dropped by 27 million.

The surplus of the services balance increased by 257 million euros, exclusively owing to a significant rise in net travel receipts (up by 265 million) and a slight increase in net receipts from “other” services (up by 7 million). By contrast, net transport receipts dropped slightly. The rise in the surplus of the travel services balance is mainly attributable to a 258 million (or 12.3%) increase in travel spending by non-residents in Greece (also reflecting a 14.0% rise in non-resident travellers’ arrivals, according to the Bank of Greece’s border survey), while travel spending by residents abroad declined by 6.2 million (or 3.1%).

The income account deficit rose by 209 million euros, mainly as a result of higher net interest, dividend and profit payments.

Finally, the current transfers balance showed a 1.9 billion euros surplus in July 2013, against a 100 million deficit in July 2012.

In the January-July 2013 period, the current account deficit fell by 6.2 billion euros (or 97.6 pct) year-on-year, to 156 million. This development is attributable, primarily, to a significant decline in the trade deficit (down by 3.0 billion) and, secondarily, to increases in the current transfers and services surpluses (up by 2.4 billion and 774 million, respectively); the income account deficit also narrowed. The considerable improvement in the current transfers balance is chiefly attributable to these developments in July.

In more detail, the trade deficit shrank owing to respective declines in the net oil import bill by 2.2 billion (or 33.4 pct), in the trade deficit excluding oil and ships by 677 million (or 12.4 pct), and in net payments for purchases of ships by 134 million (or 18.0 pct). Receipts from exports of goods excluding oil and ships rose by 4.2 pct, while the corresponding import bill fell by 2.6 pct.

Travel spending in Greece by non-residents grew by 15.5 pct year-on-year. At the same time, travel spending by residents abroad fell by 7.4 pct. As a result, the travel balance showed a 4.6 billion euros surplus, compared with 3.8 billion in the same period of 2012.

The income account deficit fell by 106 million year-on-year, mainly owing to a decline in net interest payments on Greek government bonds held by non-residents (following the PSI).

Finally, the current transfers balance showed a surplus of 3.8 billion, up by 2.4 billion year-on-year.

Source: AMNA