Bank of Greece: Positive Airbnb effect on tourism and recovering real estate sectors

2 January 2019
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The positive effects of the so-called “Airbnb effect” on Greece’s recovering real estate sector came under the Bank of Greece’s (BoG) scrutiny, with the effects listed in the central bank’s recent Interim Report on Monetary Policy 2018, Greek daily Naftemporiki reports.

The interim report makes a particular reference to Greece’s growing tourism sector, as well as investments in high-end real estate.

Conversely, low-end properties, residential and commercial, continued to record very low demand in the country, due to restricted liquidity and disappearing disposable incomes by would-be buyers and investors over the past decade.

The Bank of Greece announced that in October 2018, the current account registered a deficit of €871 million, up by €82 million year-on-year, due to a deterioration mainly in the balance of goods, as well as in the secondary income account. By contrast, the services balance and the primary income account improved while tourism revenues grew to 1.41 billion euros from 1.19 billion euros in the same month last year.

It should be noted that changes in the primary and secondary income accounts were limited.

The deficit of the balance of goods grew, mainly due to an increase in the deficit of the balance of goods excluding oil, as the relevant imports rose at a much faster pace than the corresponding exports (at current prices). It should be noted that, at constant prices, total exports of goods increased by 10.9% (non-oil exports of goods rose by 13.5%) and total imports of goods rose by 15.4% (non-oil imports of goods grew by 22%).

The surplus of the services balance increased, which is mainly attributable to an improvement in the travel balance, as non-residents’ arrivals and the corresponding receipts increased by 15.6% and 18.3%, respectively. An improvement was also recorded in the transport and other services balance, with sea transport receipts rising by 32% year-on-year.

In the January-October 2018 period, the current account showed a deficit of €2.1 billion, up by €1.6 billion year-on-year. This development is attributable to a deterioration in the balance of goods and the primary income account, which was partly offset by an improvement chiefly in the services balance, as well as in the secondary income account.

The deficit of the balance of goods grew by €2.2 billion, despite the continuing upward trend of exports, as imports also accelerated year-on-year (at current prices). At constant prices, total exports of goods increased by 7.9% (non-oil exports of goods rose by 11.3%) and total imports of goods grew by 7.3% (non-oil imports of goods increased by 10.5%).

The surplus of the services balance rose by €1.2 billion, on account of improvements chiefly in the travel balance and, secondarily, the transport balance, while the other services balance deteriorated. Specifically, non-residents’ arrivals and the relevant receipts rose by 10.8% and 9.9%, respectively. Additionally, sea transport receipts also increased, by 14%.

Furthermore, tourism-related revenue for the 10-month period reached 15.6 billion euros against 14.2 billion euros in 2017 and 12.8 billion during 2016.

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