Balance of payments: November 2018

Current account

In November 2018, the current account showed a deficit of €1.4 billion, up by €292 million year-on-year.The widening of the current account is attributable to the deterioration of the balance of goods and the primary and secondary income accounts. By contrast, the balance of services improved.

The deficit of the balance of goods grew, owing to a worsening of the oil balance, while the non-oil balance of goods improved. It should be noted that, at constant prices, total exports of goods increased by 12.0% (non-oil exports of goods rose by 11.3%) and total imports of goods rose by 13.2% (non-oil imports of goods grew by 3.0%).

The surplus of the services balance increased, mainly as a result of an improvement in the travel balance, given that non-residents' arrivals and the corresponding receipts rose by 6.2% and 42.5%, respectively, as well as an improvement in the transport balance, which is due to a rise of 18.2% in net sea transport receipts compared with November 2017. The other services balance also improved.

The primary income account deteriorated, almost exclusively as a result of higher net interest, dividend and profit payments. The secondary income account also worsened, but to a smaller extent.

In the January-November 2018 period, the current account showed a deficit of €3.8 billion, up by €2.1 billion year-on-year. The widening of the current account is attributable to the deterioration in the balance of goods and the primary income account, which however 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 €2.5 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 8.3% (non-oil exports of goods rose by 11.3%) and total imports of goods grew by 7.8% (non-oil imports of goods increased by 9.8%).

The surplus of the services balance rose by €1.3 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 travel receipts rose by 10.6% and 9.7%, respectively. Additionally, transport receipts also increased, by 14.7%.
Lastly, the primary income account showed a deficit, which was larger than in the same period of 2017, mainly due to higher net interest, dividend and profit payments, while the deficit of the secondary income account declined, owing to an improvement in the general government component.

Capital account

In November 2018, the capital account registered a surplus, which was larger by €199 million compared with November 2017, due to an increase in general government net receipts. In the January-November 2018 period,a surplus was recorded, which however was lower than in the corresponding period of 2017.

Combined current and capital account

In November 2018, the combined current and capital account (corresponding to the economy's external financing requirements) showed a deficit of €1.1 billion, up by €92 million year-on-year. In the January-November 2018period, the combined current and capital account recorded a deficit of €3.4 billion, compared with a deficit of €1.2 billion in the same period of 2017.

Financial account

In November 2018, under direct investment, residents' net external liabilities rose by €382 million. The most important transaction was the participation of Hellenic Healthcare S.A.R.L. (Netherlands) in the subscribed capital of HELLENIC HEALTHCARE Holdings S.A., which then acquired the Diagnostic and Therapeutic Centre of Athens HYGEIA S.A.

Under portfolio investment, a net increase in residents' external assets is exclusively due to a rise of €206 million in residents' holdings of foreign bonds and Treasury bills. A net decrease in their external liabilities is mainly attributable to a decline of €794 million in non-residents' holdings of Greek government bonds and Treasury bills.

Under other investment, a net decrease in residents' external assets mainly reflects a decline of €618 million in residents' deposit and repo holdings abroad. A net increase in external liabilities reflects chiefly a net rise of €407 million in the outstanding debt of the public and the private sector to non-residents.

In the January-November 2018period, under direct investment, residents' net external assets and liabilities - the latter representing foreign direct investment -posted increases of €651 million and €3.4 billion, respectively.

Under portfolio investment, a net increase in residents' external assets is mainly attributable to a rise (of €944 million) in residents' holdings of foreign bonds and Treasury bills, which was largely offset by a decline in their holdings of foreign equities. A net increase in their liabilities is mainly due to a rise of €1.6 billion in non-residents' holdings of Greek government bonds and Treasury bills.

Under other investment, a net decrease in residents' external assets is attributable to a decline of €3.4 billion in residents' deposit and repo holdings abroad and the statistical adjustment related to holdings of banknotes (1). A net decline in external liabilities reflects mainly a drop of €23.6 billion in non-residents' deposit and repo holdings in Greece (the TARGET account included), which was largely offset by a €21.1 billion increase in the outstanding debt of the public and the private sector to non-residents.

At end-November 2018, Greece's reserve assets remained almost unchanged year-on-year at €6.5 billion.

Note: Balance of payments statistics for December 2018 will be released on 20 February 2019.

Related link:Balance of payments: November - Table

(1)In the January-November 2018 period, both assets and liabilities registered a decrease on account of the statistical adjustment related to holdings of euro banknotes, which came to €2.0 billion and €4.8 billion, respectively.