Balance of Payments: July 2022

20/09/2022 - Press Releases

- In July 2022, the current account surplus almost doubled year-on-year, mainly due to an improvement in the balance of services and, to a lesser extent, in the primary income account, which was partly offset by a deterioration primarily in the balance of goods, as well as in the secondary income account.

- In the January-July 2022 period, the current account deficit grew year-on-year, chiefly owing to a worsening in the balance of goods and the primary income account, which was offset to a degree by an improvement in the balance of services and the secondary income account.

Current account

In July 2022, the current account surplus grew by €533.9 million year-on-year and stood at €1.1 billion.

A rise in the deficit of the balance of goods is accounted for by a larger, in absolute terms, increase in imports than in exports. Exports grew by 40.7% at current prices (4.0% at constant prices) and imports rose by 39.9% at current prices (16.0% at constant prices). In particular, non-oil exports of goods grew by 21.9% at current prices (3.8% at constant prices) and non-oil imports of goods rose by 22.7% at current prices (14.9% at constant prices).

A rise in the services surplus is due to an improvement in, primarily, the travel balance and, secondarily, the transport balance, while the surplus of the other services balance fell. Non-residents' arrivals rose by 87.3% and the relevant receipts by 62.7% year-on-year. It should be noted that, compared with July 2019, arrivals stood at 93.0% and receipts marginally exceeded the corresponding level. The surplus of the transport balance increased on the back of an improvement in the sea transport surplus.

The primary income account deficit fell year-on-year, owing to lower net interest, dividend and profit payments. The secondary income account surplus fell year-on-year, mainly as a result of lower net receipts in the general government balance.[1]

In the January-July 2022 period, the current account deficit recorded an increase of €2.9 billion year-on-year and stood at €9.7 billion.

A rise in the deficit of the balance of goods is due to the fact that imports increased more than exports. In particular, exports grew by 39.9% at current prices (5.3% at constant prices) and imports increased by 47.6% at current prices (21.6% at constant prices). Specifically, non-oil exports and imports of goods grew by 26.6% and 30.9%, respectively, at current prices (10.0% and 22.0% at constant prices).

A rise in the surplus of the services balance is mainly due to an improvement in the travel balance, as well as in the transport and other services balances. Non-residents' arrivals rose by 191.4% and the relevant receipts by 154.2% year-on-year, representing 87.9% and 97.1% of the respective levels in 2019. Net transport receipts increased by 33.4%.

The surplus of the primary income account fell year-on-year, mainly due to a decline in net receipts under other primary income. The surplus of the secondary income account rose due to an improvement in the other sectors of the economy, as well as in general government.

Capital account

In July 2022, the capital account registered a surplus - against a small deficit in July 2021 - of €475.7 million, mainly due to higher general government net receipts. In the January-July 2022 period, the capital account surplus almost tripled year-on-year and stood at €2.0 billion, mainly owing to a rise in general government net receipts.

Combined current and capital account

In July 2022, the surplus of the combined current and capital account (corresponding to the economy's external financing requirements) tripled and reached €1.6 billion. In the January-July 2022 period, the deficit of the combined current and capital account increased by €1.6 billion year-on-year and stood at €7.8 billion.

Financial account

In July 2022, under direct investment, residents' external assets increased by €0.8 billion and residents' external liabilities declined by €257.7 million, without any remarkable transactions.

Under portfolio investment, an increase in residents' external assets is attributable to a rise of €178.0 million in residents' holdings of foreign bonds and Treasury bills and to an increase of €144.8 million in their holdings of foreign equities. A decrease in their liabilities is almost entirely attributable to a drop of €1.2 billion in non-residents' holdings of Greek bonds and Treasury bills.

Under other investment, a drop in residents' external assets is due to a decrease of €584.0 million in residents' deposit and repo holdings abroad, which was partly offset by a €327.0 million statistical adjustment associated with the issuance of banknotes and a rise of €208.7 million in loans extended to non-residents. An increase in their liabilities reflects a rise of €1.0 billion in non-residents' deposit and repo holdings in Greece (including the TARGET account) and, to a lesser extent, a €327.0 million statistical adjustment related to the issuance of banknotes, which were partly offset by a drop of €160.1 million in the outstanding debt to non-residents.

In the January-July 2022 period, under direct investment, residents' external assets increased by €1.1 billion and residents' external liabilities, which represent non-residents' direct investment in Greece, rose by €4.1 billion.

Under portfolio investment, a net rise in residents' external assets is mainly due to an increase of €9.6 billion in residents' holdings of foreign bonds and Treasury bills. A net increase in their liabilities is almost exclusively due to a rise of €2.2 billion in non-residents' holdings of Greek bonds and Treasury bills.

Under other investment, a drop in residents' external assets is due to a decline of €4.7 billion in residents' deposit and repo holdings abroad, which was partly offset by a €3.1 billion statistical adjustment associated with the issuance of banknotes. A rise in residents' external liabilities reflects chiefly an increase of €8.6 billion in non-residents' deposit and repo holdings in Greece (including the TARGET account) and a €3.1 billion statistical adjustment associated with the issuance of banknotes, which was partly offset by a decline of €3.9 billion in the outstanding debt to non-residents.

At end-July 2022, Greece's reserve assets stood at €11.0 billion, compared with €9.4 billion at end-July 2021.

Note: Balance of payments data for August 2022 will be released on 21 October 2022.

[1] It should be noted that in July 2022, as in the same month of 2021, ANFA/SMP profits were transferred to the Greek government. This transfer is recorded under the secondary income account.