21/07/2022 - Press Releases

-In May 2022, the current account deficit increased year-on-year, due to a deterioration mainly in the balance of goods and, to a lesser extent, the primary and the secondary income accounts, which was partly offset by an improvement in the balance of services.

-In the January-May2022 period, the current account deficit grew substantially year-on-year owing to a worsening of, primarily, the balance of goods and, secondarily, the primary income account, which was offset to a degree by an improvement in the balance of services and the secondary income account.

Current accountIn May 2022, the current account deficit grew by €646.6 million year-on-year and stood at €2.0 billion.

A rise in the deficit of the balance of goods is accounted for by a larger increase in imports than in exports. Exports grew by 49.2% at current prices (8.6% at constant prices) and imports rose by 59.9% at current prices (32.5% at constant prices). In particular, non-oil exports of goods grew by 43.2% at current prices (22.6% at constant prices) and non-oil imports of goods rose by 46.2% at current prices (35.9% at constant prices).

The increase in the services surplus is chiefly attributable to an improvement, primarily, of the travel services balance, but also of the other individual components. Non-residents' arrivals grew by 672.5% and the relevant receipts by 536.4% year-on-year, corresponding to 92.4% and 90.3% of the respective levels in 2019. The surplus of the transport balance increased on the back of an improvement in the sea transport surplus.

The surplus of the primary income account decreased year-on-year, mainly as a result of lower net receipts from other primary income. The deficit of the secondary income account more than doubled year-on-year, as a result of higher payments in the general government balance.

In the January-May 2022 period, the current account deficit recorded a large increase of €4.1 billion year-on-year and stood at €10.1 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 35.2% at current prices (3.8% at constant prices) and imports increased by 48.2% at current prices (23.0% at constant prices). Specifically, non-oil exports and imports of goods grew by 26.9% and 33.8%, respectively, at current prices (10.9% and 24.9% 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 grew by 552.9% and the relevant receipts by 547.9% year-on-year, corresponding to 81.7% and 87.8% of the respective levels in 2019. Net transport receipts increased by 23.4%.

The surplus of the primary income account dropped year-on-year, mainly due to a decrease in net receipts from other primary income, while the secondary income account turned from deficit to surplus, as a result of lower general government net payments.

Capital account
In May 2022, the capital account surplus dropped by €51 million year-on-year and stood at €151.6 million. In the January-May 2022 period, the capital account surplus more than doubled year-on-year and stood at €1.1 billion, owing to a rise in general government net receipts.

Combined current and capital account
In May 2022, the deficit of the combined current and capital account (corresponding to the economy's external financing requirements) grew to €1.9 billion, from €1.2 billion in May 2021. In the January-May 2022 period, the deficit of the combined current and capital account increased by €3.4 billion year-on-year and stood at €9.1 billion.

Financial account
In May 2022, under direct investment, residents' external assets increased by €35.7 million and residents' external liabilities rose by €445.5 million, without any remarkable transactions.

Under portfolio investment, an increase in residents' external assets is almost exclusively attributable to a rise of €2.3 billion in residents' holdings of foreign bonds and Treasury bills. An increase in their liabilities is mainly due to a rise of €728.0 million in non-residents' holdings of Greek government bonds and Treasury bills.

Under other investment, a drop in residents' external assets is due to a decline of €724.0 million in residents' deposit and repo holdings abroad and a decrease of €386.9 million in loans extended to non-residents, which was partly offset by a €652.0 million statistical adjustment associated with the issuance of banknotes. An increase in their liabilities is due to a rise of €1.6 billion in non-residents' deposit and repo holdings in Greece (the TARGET account included) and, to a lesser extent, a €652.0 million statistical adjustment related to the issuance of banknotes, which were partly offset by a decline of €377.5 million in the outstanding debt to non-residents.

In the January-May 2022 period, under direct investment, residents' external assets increased by €275.3 million and residents' external liabilities, which represent non-residents' direct investment in Greece, rose by €3.5 billion.

Under portfolio investment, a net rise in residents' external assets is mainly due to an increase of €7.5 billion in residents' holdings of foreign bonds and Treasury bills. A net increase in their liabilities is chiefly due to a rise of €3.3 billion in non-residents' holdings of Greek government bonds and Treasury bills.

Under other investment, a drop in residents' external assets is due to a decline of €3.2 billion in residents' deposit and repo holdings abroad, which was partly offset by a €2.3 billion statistical adjustment associated with the issuance of banknotes. A rise in residents' external liabilities reflects chiefly an increase of €5.3 billion in non-residents' deposit and repo holdings in Greece (the TARGET account included) and a statistical adjustment associated with the issuance of banknotes, which was partly offset by a decline of €2.0 billion in the outstanding debt to non-residents.

At end-May 2022, Greece's reserve assets stood at €10.8 billion, compared with €8.7 billion at end-May 2021.

Note: Balance of payments data for June 2022 will be released on 19 August 2022.

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Bank of Greece published this content on 21 July 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 21 July 2022 08:13:04 UTC.