Balance of payments: December 2020

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Balance of payments: December 2020 22/02/2021 - Press Releases

Current account

In December 2020, the current account deficit stood at €654 million, up by €82 million year-on-year. This development is attributable to a deterioration in the balance of services and the secondary income account, which was partly offset by an improvement in the balance of goods and the primary income account.

The deficit of the balance of goods declined, as total exports increased, while total imports decreased. Specifically, exports of goods registered a 2.0% increase at current prices (18.6% at constant prices) and the corresponding imports dropped by 1.1% at current prices (up by 10.3% at constant prices). It should be noted that developments in exports and imports of goods at current prices were largely affected by changes in the value of oil exports and imports.

The services surplus more than halved year-on-year, due to a worsening of all its sub-components. Travel receipts and inbound traveller flows fell by 88.6% and 86.0%, respectively, compared with December 2019. Moreover, sea transport receipts declined by 29.0%.

The primary income account improved, mainly due to lower interest, dividend and profit payments, while the surplus of the secondary income account fell, mainly owing to a decline in general government net receipts.

In 2020, the current account showed a deficit of €11.2 billion, up by €8.4 billion year-on-year. This development is almost exclusively due to a decline in the services surplus, which was partly offset mainly by a €4.3 billion drop in the balance of goods deficit and secondarily by an improvement in the primary income account.

Α decline in the deficit of the balance of goods is attributable to a larger - in absolute terms - and faster decrease in imports than in exports. These changes are largely due to developments in the value of oil exports and imports. Specifically, total exports of goods fell by 10.9% at current prices, while they grew by 5.5% at constant prices. Total imports of goods dropped by 14.2% at current prices (‑3.8% at constant prices).

A significant decrease in the services surplus is attributable to a deterioration in, primarily, the travel services balance and, secondarily, the transport balance, while the other services balance improved. Both travel receipts and non-residents' arrivals fell by 76.5% year-on-year. Sea transport receipts dropped by 15.3%.

The deficit of the primary income account declined, mainly due to a drop in net interest, dividend and profit payments, as well as to a rise in net receipts from the other primary income account. Lastly, the surplus of the secondary income account registered a small decline against 2019.

Capital account

In December 2020, the capital account registered a surplus of €551 million, up by €334 million year-on-year, while for 2020 as a whole it registered a surplus of €2.7 billion, up by €2.1 billion year-on-year.

Combined current and capital account

In December 2020, the combined current and capital account (corresponding to the economy's external financing requirements) showed a deficit of €103 million, down by €253 million year-on-year. In 2020, the combined current and capital account showed a deficit of €8.4 billion, up by €6.4 billion year-on-year.

Financial account

In December 2020, under direct investment, residents' external assets registered an increase of €100 million, while residents' external liabilities (stemming from non-residents' direct investment in Greece) registered a rise of €352 million, without any remarkable transactions.

Under portfolio investment, an increase in residents' external assets is mainly due to a rise of €1.9 billion in residents' holdings of foreign bonds and Treasury bills. A decline in residents' external liabilities is mainly due to a decrease of €2 billion in non-residents' holdings of Greek government bonds and Treasury bills.

Under other investment, a drop in residents' external assets mainly reflects a decline of €419 million in loans extended to non-residents and the statistical adjustment related to the issuance of banknotes, which was partly offset by a €348 million increase in residents' deposit and repo holdings abroad. An increase in external liabilities chiefly reflects a rise of €6.4 billion in the outstanding debt to non-residents (associated with a corporate conversion of a systemic credit institution), which was partly offset by a decrease of €1.7 billion in non-residents' deposit and repo holdings in Greece (the TARGET account included).

In 2020, under direct investment, residents' external assets rose by €690 million and the corresponding liabilities by €3.2 billion.

Under portfolio investment, an increase in residents' external assets is chiefly attributable to a rise (of €33.7 billion) in residents' holdings of foreign bonds and Treasury bills. A decline in residents' external liabilities is mainly due to a decrease of €12.3 billion in non-residents' holdings of Greek government bonds and Treasury bills.^[1]

Under other investment, a rise in residents' external assets reflects mainly a statistical adjustment (of €2.5 billion) associated with the issuance of banknotes. A rise in their liabilities reflects chiefly an increase of €40.1 billion in non-residents' deposit and repo holdings in Greece (the TARGET account included), as well as a €14.9 billion increase in the outstanding debt of the public and the private sector to non-residents.

At end-December 2020, Greece's reserve assets stood at €9.7 billion, compared with €7.6 billion at end-December 2019.

Note: Balance of payments data for January 2021 will be released on 23 March 2021.

^[1] It should be noted that developments under portfolio and other investment were largely driven by loan securitisations carried out by systemic credit institutions.