Greek current account deficit widened in January-February

21 April 2020
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The Greek current account deficit widened to 2.4 billion euros in the January-February period, up 231 million compared with the same period in 2019, as the small improvement in the balance of goods only partly offset the deterioration of the other accounts, the Bank of Greece said on Tuesday.

The central bank, in a report, said that the goods balance deficit fell due to the improvement of the non-oil balance of goods, while the oil balance deteriorated.

Exports of goods increased by 5.1 pct at current prices (6.4 pct at constant prices), while, in particular, non-oil exports of goods increased by 10 pct at both current and constant prices. Imports of goods rose by 1.9 pct at current prices and remained almost unchanged at constant prices.

The services balance surplus declined due to the deterioration primarily of the transport balance, as well as the other services balance. On the contrary, the travel services balance improved. Non-residents’ arrivals and relevant receipts increased by 21.8 pct and 22.9 pct respectively.

In the January-February period, under direct investment, residents’ external liabilities increased by 681 million euros (foreign direct investment in Greece).

Under portfolio investment, the increase in residents’ external assets was attributed to the rise in residents’ holdings of shares of foreign companies and mutual funds (157 million) and of bonds and Treasury bills abroad (149 million).

Under other investment, the increase in residents’ external assets is mainly due to the increase (by 745 million) in residents’ deposits and repo holdings abroad and the statistical adjustment associated with the issuance of euro banknotes (1.2 billion). The increase in residents’ external liabilities mainly reflects the increase (by 3.3 billion) in non-residents’ deposits and repo holdings in Greece.

In February, the current account balance recorded a deficit of 1.1 billion euros, up by 122 million year-on-year, as a result of the deterioration of the goods and services balance and the primary income account. By contrast, the secondary income account showed a surplus, from a deficit in February 2019.

The deficit of the goods balance increased due to the worsening of the oil balance, while the non-oil balance of goods improved. Total exports of goods fell by 2.4 pct at current prices as a result of a sharp drop in oil exports (by 25.5 pct), due to both falling international oil prices and a reduction in the volume of exports (exports of oil decreased by 15 pct at constant prices).

In contrast, non-oil exports of goods increased by 6.9 pct at current prices (7.1 pct at constant prices). At the same time, imports of goods increased slightly by 1.3 pct at current prices (2.7 pct at constant prices).

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