The surplus of the services balance grew by 278 million euros as a result of, mainly, higher net travel receipts and, secondarily, lower net payments for “other” services, while net transport receipts declined. More specifically, travel spending in Greece by non-residents grew considerably in July (by 16.7 percent). Both gross transport receipts (chiefly from merchant shipping) and the corresponding payments showed a decline, of 16.2 percent and 13.7 percent, respectively; as a result, net receipts dropped by 18.6 percent.
The central bank said that the income account deficit fell by 118 million euros, mainly as a result of a 126 million euros decrease in net payments of interest, dividends and profits. Finally, the current transfers balance showed a surplus of 43 million, compared with just 4 million euros in July.
In the January-July 2011 period, the current account deficit fell by 1.4 billion euros or 9.0 percent year-on-year, to 14.2 billion euros. This chiefly reflects a significant decline of 2.4 billion in the non-oil trade deficit, a rise of 483 million in the surplus of the services balance and a very small increase in the current transfers surplus, which more than offset a large rise in the net oil import bill and a widening of the income account deficit.
In more detail, the overall trade deficit shrank by 1.2 billion euros, as a result of a 2.2 billion decrease in the trade deficit excluding oil and ships and a 201 million fall in net payments for purchases of ships. By contrast, the net oil import bill rose by 1.2 billion euros. Most importantly, receipts from exports of goods excluding oil and ships rose by 15.6 percent, while the corresponding import bill declined by 7.3 percent.
A 483 million euros increase in the surplus of the services balance reflects higher net travel receipts and lower net payments for “other” services, which more than offset a contraction in net transport receipts.
Gross transport receipts (chiefly from merchant shipping) fell by 11.8 percent and the corresponding payments dropped by 9.2 percent; as a result, net receipts shrank by 634 million euros. During the same period, travel spending in Greece by non-residents grew markedly (by 14.2 percent year-on-year), while travel spending abroad by residents rose by only 1.5 percent. According to data from the Bank of Greece’s border survey, in the January-July period non-residents’ arrivals rose by 11.4 percent year-on-year.
The income account deficit rose by 273 million euros year-on-year, mainly due to higher net payments of interest, dividends and profits (up by 4.3 percent). Finally, the current transfers balance showed a surplus of 1.056 billion euros, up by 12 million compared with the corresponding period of 2010.
In July 2011, the capital transfers balance showed a deficit of 254 million euros, down by 410 million year-on-year. In the January-July 2011 period, the capital transfers balance showed a surplus of 564 million euros, compared with 801 million in the corresponding period of 2010.
In July 2011, the deficit of the combined current account and capital transfers balance reached 648 million euros, compared with 806 million in July 2010. In the January-July 2011 period, this deficit came to 13.6 billion euros, compared with 14.8 billion in the corresponding period of 2010.
In July 2011, non-residents’ direct investment in Greece showed a net inflow of 457 million euros. The most important transaction concerned a 392 million inflow for the acquisition by Deutsche Telekom (Germany) of 10 percent of the share capital of OTE (Hellenic Telecommunications Organisation). Residents’ direct investment abroad recorded a net outflow of 407 million euros. The most important transaction under this category concerned a capital injection of 350 million by EFG Eurobank Ergasias SA to its subsidiary “EFG Eurobank Ergasias SA Spolka Akcyjna Oddzial w Polsce” (Poland).
In the January-July 2011 period, direct investment showed a net outflow of 656 million (compared with a net inflow of €679 million in the corresponding period of 2010.
A net outflow of 9.4 billion euros was observed under portfolio investment (against a net outflow of 6.2 billion in the corresponding period of 2010). Under “other” investment, a net inflow of 24.5 billion (compared with a net inflow of 21.1 billion in the corresponding period of 2010) is mainly attributable to a €31.6 billion increase in the net outstanding debt of the public and the private sector to non-residents.
At end-July 2011, Greece’s reserve assets stood at 4.75 billion euros.