Greek current account balance improves on travel receipts and investments in 2023

According to the Bank of Greece, in August 2023, the current account surplus increased slightly by €20.0 million year‑on‑year and stood at €497.7 million.

A small decrease in the deficit of the balance of goods is accounted for by a larger decline in imports than in exports in absolute terms. Exports dropped by 24.5% at current prices (‑18.0% at constant prices) and imports fell by 15.1% at current prices (‑2.5% at constant prices). More specifically, non‑oil exports of goods declined by 12.7% at current prices (‑14.3% at constant prices), whereas non‑oil imports of goods rose by 1.6% at current prices (1.4% at constant prices).

An increase in the surplus of the services balance is due to an improvement in the travel balance and, to a lesser extent, in the other services balance, while the transport balance deteriorates. Non‑residents’ arrivals rose by 10.4% and the relevant receipts by 5.2% year‑on‑year.

The deficit of the primary income account increased year‑on‑year, mainly as a result of higher net interest, dividend, and profit payments, as well as a drop in net receipts from other primary income. The deficit of the secondary income account decreased compared with August 2022, reflecting a fall in general government net payments, which was partly offset by an increase in the net payments of the other sectors of the economy excluding general government.

In the January‑August 2023 period, the current account deficit decreased by €4.2 billion year‑on‑year to stand at €6.9 billion.

A decline in the deficit of the balance of goods is accounted for by a larger drop in imports than in exports. Exports fell by 5.7% at current prices (‑1.1% at constant prices), whereas imports declined by 10.1% at current prices (‑3.2% at constant prices). Specifically, at current prices non‑oil exports of goods rose by 1.6%, while the corresponding imports decreased by 2.1% (‑3.3% and ‑4.1% at constant prices, respectively).

An increase in the services surplus is attributed to an improvement, primarily, in the travel balance and, secondarily, in the other services balance, which was partly offset by a deterioration in the transport balance. Non‑residents’ arrivals grew by 18.4% and the relevant receipts increased by 15.3% year‑on‑year.

The primary income account deficit deteriorated year‑on‑year, due to an increase in net interest, dividend and profit payments, which was partly offset by a rise in net receipts from other primary income. The surplus of the secondary income account grew year‑on‑year, owing to higher net receipts mainly in the general government and, to a lesser extent, in the other sectors of the economy excluding general government.

Capital account

In August 2023, the capital account surplus almost halved relative to August 2022 and stood at €101.6 million, as a result of net payments, instead of net receipts, being recorded in the other sectors of the economy excluding general government.

In the January‑August 2023 period, the capital account surplus declined year‑on‑year and stood at €2.0 billion, mainly owing to lower net receipts in the general government sector.

Combined current and capital account

In August 2023, the surplus of the combined current and capital account (corresponding to the economy's external financing requirements) dropped to €599.3 million.

In the January‑August 2023 period, the deficit of the combined current and capital account declined significantly year‑on‑year and amounted to €4.9 billion.

Financial account

In August 2023, under direct investment, residents’ external assets grew by €96.7 million and residents’ external liabilities rose by €365.0 million, without any remarkable transactions.

Under portfolio investment, an increase in residents’ external assets is almost exclusively attributable to a rise of €338.0 million in residents’ holdings of foreign bonds and Treasury bills. A decrease in their liabilities is mostly due to a decline of €173.0 million in non‑residents’ holdings of Greek bonds and Treasury bills.

Under other investments, an increase in residents’ external assets mainly reflects a statistical adjustment (of €727.0 million) associated with the issuance of banknotes and, to a lesser extent, a rise of €168.0 million in loans extended to non‑residents, which were partly offset by a decline of €392.0 million in residents’ deposit and repo holdings abroad. A drop in their liabilities reflects, primarily, a decrease of €798.0 million in non‑residents’ deposit and repo holdings in Greece (the TARGET account included) and, secondarily, a decline of €355.9 million in the outstanding debt to non‑residents, which were offset to a degree by a €727.0 million statistical adjustment related to the issuance of banknotes.

In the January‑August 2023 period, under direct investment, residents’ external assets increased by €620.0 million and residents’ external liabilities, which represent non‑residents' direct investment in Greece, rose by €3.5 billion.

Under portfolio investment, an increase in residents’ external assets is mainly due to a rise of €5.4 billion in residents’ holdings of foreign bonds and Treasury bills. An increase in external liabilities is mainly attributable to a rise of €5.1 billion in non‑residents’ holdings of Greek bonds and Treasury bills, which was partly offset by a €296.0 million drop in their holdings of Greek equities.

Under other investments, a decline in residents’ external assets stems from a €4.8 billion decrease in residents’ deposit and repo holdings abroad and, to a lesser degree, from a €174.4 million drop in loans extended to non‑residents by domestic financial institutions, which were partly offset by a €3.1 billion statistical adjustment associated with the issuance of banknotes. A decline in their liabilities reflects a drop of €2.5 billion in non‑residents’ deposit and repo holdings in Greece (the TARGET account included), as well as a decrease of €1.1 billion in the outstanding debt to non‑residents, which were mostly offset by a €3.1 billion statistical adjustment related to the issuance of banknotes.

At the end of August 2023, Greece’s reserve assets stood at €12.2 billion, compared with €11.1 billion at the end of August 2022.

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