Balance of payments: November 2020

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Balance of payments: November 2020 20/01/2021 - Press Releases

Current account

In November 2020, the current account deficit decreased by €127 euro year-on-year and stood at €1.3 billion. This development is attributable to an improvement in the balance of goods and the primary income account, which was partly offset by a deterioration in the services balance and the secondary income account.

The drop in the balance of goods deficit is attributable to the fact that exports decreased less than imports. Total exports of goods fell by 5.7% at current prices (12.1% at constant prices), owing to a decline in the value of oil exports, which reflects a drop in oil prices. Non-oil exports remained almost unchanged year-on-year both at current and at constant prices. Total imports of goods fell by 9.1% at current prices (remaining almost unchanged at constant prices), mainly due to a decrease in the value of oil imports.

A decline in the services surplus is mainly accounted for by lower net transport and travel receipts, while the other services balance registered a surplus, against a deficit in November 2019. Non-residents' arrivals and relevant receipts fell by 81.1% and 80.8%, respectively, year-on-year. The surplus of the transport balance dropped mainly on account of a 22.8% decrease in net sea transport receipts.

The deficit of the primary income account declined in November 2020, chiefly as a result of the improved investment balance, owing to interest, dividend and profit payments. The deficit in the secondary income account increased, due to a deterioration in the general government balance.

In the January-November 2020 period, the current account showed a deficit of €10.5 billion, up by €8.4 billion year-on-year. This development is exclusively a result of a decline in the services surplus, which was partly offset by a €4.2 billion drop in the balance of goods deficit, as well as an improvement - albeit slighter - in the primary and secondary income accounts.

Α decline in the balance of goods deficit is attributable to a larger - in absolute terms - and faster decrease in imports than in exports. Specifically, total exports of goods fell by 12.1% at current prices (4.2% at constant prices). Total imports of goods dropped by 15.3% at current prices (-5% at constant prices). It should be noted that developments in exports and imports at current prices largely reflect a decline in the value of oil exports and imports, respectively, as a result of lower international oil 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 dropped by 76.3% year-on-year. Transport receipts fell by 19.2%.

Capital account

In November 2020, the capital account surplus grew by €87 million year-on-year and stood at €345 million. In the January-November 2020 period, the capital account surplus stood at €2.2 billion, up by €1.7 billion year-on-year, owing to a rise in EU capital transfers to the general government.

Combined current and capital account

In November 2020, the deficit of the combined current and capital account (corresponding to the economy's external financing requirements) fell to €914 million, against €1.1 billion in November 2019. In the January-November 2020 period, the combined current and capital account recorded a deficit of €8.3 billion, compared with a deficit of €1.7 billion year-on-year.

Financial account

In November 2020, under direct investment, residents' external assets rose by €48 million. Residents' external liabilities grew by €224 million.

Under portfolio investment, an increase in residents' external assets is mainly due to a rise of €1.7 billion in residents' holdings of foreign bonds and Treasury bills. A net decline in residents' external liabilities is due to a decrease of €2.2 billion in non-residents' holdings of Greek government bonds and Treasury bills.

Under other investment, residents' external assets recorded a small decrease. An increase in their liabilities reflects a rise of €2.5 billion in non-residents' deposit and repo holdings in Greece (the TARGET account included), as well as a €2.1 billion increase in the outstanding external debt (also including the first EU disbursement under the European instrument for temporary support to mitigate unemployment risks in an emergency - SURE).

In the January-November 2020 period, under direct investment, residents' external assets rose by €589 million and residents' external liabilities, which represent non-residents' direct investment in Greece, increased by €2.8 billion.

Under portfolio investment, an increase in residents' external assets is due to a rise of €32 billion in residents' holdings of foreign bonds and Treasury bills. A decline in residents' external liabilities is mainly due to a decrease of €10.3 billion in non-residents' holdings of Greek government bonds and Treasury bills.^[1]

Under other investment, a rise in residents' external assets reflects mainly an increase (by €2.8 billion) in the statistical adjustment associated with the issuance of banknotes. A rise in residents' liabilities reflects chiefly an increase of €41.7 billion in non-residents' deposit and repo holdings in Greece (the TARGET account included), as well as an €8.5 billion rise in the outstanding debt to non-residents.

At end-November 2020, Greece's reserve assets stood at €9.2 billion, compared with €7.3 billion at end-November 2019.

Note: Balance of payments data for December 2020 will be released on 22 February 2021.

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