Greek Tourism: +15.3% travel revenues in H1 2019 despite marginal arrivals' drop

Greek tourism revenues in June 2019 rose to 2.62 billion euros from 2.25 billion in the same month a year earlier, the Bank of Greece said on Tuesday.

According to the country's Central Bank, in June 2019, the current account showed a surplus of €874 million, against a deficit of €8.9 million year-on-year, due to improvements in the balances of goods and services and the primary income account. By contrast, the secondary income account deteriorated slightly.

The balance of goods improved year-on-year, as the deficit shrank by €496 million, despite a decline in exports. This development is due to a fall in imports, mainly of oil, as well as other goods, which was stronger than the decline in exports. It should be noted that, at constant prices, total exports of goods dropped by 4.2%.

A €338 million improvement in the services surplus is mainly accounted for by higher net travel receipts. The transport balance improved slightly, while the other services balance worsened. It should be noted that travel receipts rose by 16.4%, despite the fact that non-residents' arrivals remained unchanged year-on-year. In the first half of the year, travel receipts increased by 15.3%, although non-resident arrivals decreased slightly by 0.5% compared to the first half of 2018.

An improvement in the primary income account is attributable, on the one hand, to lower net interest, dividend and profit payments and, on the other, to higher net receipts from other primary income, which includes taxes and subsidies on products and production. Lastly, the deterioration in the secondary income account is mainly due to an increase in general government net payments.

In the first half of 2019, the current account showed a deficit of €3.9 billion, down by €759 million year-on-year. This development reflects a rise in the services surplus and an improvement in the primary and the secondary income accounts, which offset an increase in the deficit of the balance of goods.

The deficit of the balance of goods expanded due to a slowdown in export growth, combined with a sustained increase in imports. Total exports of goods rose by 1.6% at current prices (0.1% at constant prices). Total imports of goods increased by 4.2% at current prices (2.2% at constant prices).

A rise in the services surplus is due to an improvement in both the travel balance and the transport balance, while the deficit of the other services balance widened. Transport (mainly sea transport) receipts rose by 7.3%. At the same time, travel receipts increased by 15.3%, even though non-residents’ arrivals showed a small decline of 0.5% year-on-year. 

Capital account 

In June 2019, the capital account registered a surplus, against a deficit in the same month a year earlier, while in the first half of 2019 the capital account surplus increased. 

Combined current and capital account 

In June 2019, the combined current and capital account (corresponding to the economy's external financing requirements) showed a surplus of €961 million, against a deficit of €26 million year-on-year. In the first half of 2019, the combined current and capital account showed a deficit of €3.7 billion, down by €853 million year-on-year. 

Financial account 

In June 2019, under direct investment, residents' net external liabilities stemming from non-residents' direct investment in Greece increased by €196 million, without any remarkable transactions.

Under portfolio investment, a net increase in residents' external assets is due to a rise of €5.5 billion in residents' holdings of foreign bonds and Treasury bills. A net increase in residents' external liabilities is attributable to a rise of €491 million in non-residents' holdings of Greek government bonds and Treasury bills.

Under other investment, a net decrease in residents' external assets mainly reflects a decline of €1.2 billion in residents' deposit and repo holdings abroad. A net increase in liabilities principally reflects a rise of €4.9 billion in non-residents' deposit and repo holdings in Greece (the TARGET account included).

In the first half of 2019, under direct investment, residents' net external assets increased by €242 million and residents' net external liabilities, which represent non-residents' direct investment in Greece, rose by €2.0 billion.

Under portfolio investment, a net increase in residents' external assets is due to a rise of €3.8 billion in residents' holdings of foreign bonds and Treasury bills. A net increase in residents' external liabilities is accounted for by a rise of €5.2 billion in non-residents' holdings of Greek government bonds and Treasury bills.

Under other investment, a net decrease in residents' external assets mainly reflects a decline of €2.8 billion in residents' deposit and repo holdings abroad. A net decrease in liabilities chiefly reflects a decline of €2.0 billion in the outstanding debt of the public and the private sector to non-residents, as well as a decrease of €1.1 billion in non-residents' deposit and repo holdings in Greece (the TARGET account included).

At end-June 2019, Greece’s reserve assets stood at €6.7 billion, compared with €6.4 billion at end-June 2018. 

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