Current account balance shows 663mln euro surplus for June, per BoG

In its report, the central bank attributed the result mainly to a decline in the trade deficit and, secondarily, to the surplus recorded in the services balance, which was offset by the doubling of the income account deficit, whereas the current transfers surplus narrowed.

The trade deficit fell by 651 million euros, the bank said, mainly owing to a 397mln euro

decrease in the net oil import bill, while all other balances also improved. The trade deficit excluding oil and ships contracted slightly, by 87 million euros, as a result of a decline of 132 million euros or 7.0 percent in the import bill, which offset the lower (by 45 million euros, or 4.2 percent) export receipts. The ships’ balance (sales minus purchases) recorded a small surplus of 2.3 million euros.

The surplus of the services balance increased by 268 million euros, almost exclusively owing to a significant rise in net travel receipts (by 273 million) and, to a much lesser extent, a contraction in net payments for “other” services (by 22 million). By contrast, net transport receipts dropped slightly (by 27 million), exclusively on account of the higher deficit in the balance of “other” transport (excluding sea transport) services.

The rise in the surplus of the travel services balance is mainly attributable to a 272 million euros (or 20.6 percent) increase in travel spending by non-residents in Greece (also reflecting a rise in non-resident travellers’ arrivals by 16.1 percent, according to the Bank of Greece’s border survey), while travel spending by residents abroad declined marginally (by 0.8 percent). Finally, the narrowing of the “other” services deficit is chiefly attributable to a contraction of the deficit of insurance and communication services, and to a rise in the surplus of business services.

These developments were partly offset by the increase in the financial services deficit (on account of the 63mln euro fee paid to the European Financial Stability Facility, EFSF, and the International Monetary Fund, IMF, compared with 5mln euros in June 2012) and the narrowing of the construction services surplus. The income account deficit rose by 260mln euros, owing to higher net interest payments and lower net receipts from reinvested earnings (mainly as a result of mergers of foreign bank subsidiaries in Greece with Greek credit institutions).

Finally, the current transfers balance showed a surplus of 265mln euros in June 2013 (smaller than the 334mln euro surplus recorded in June 2012), mainly reflecting a corresponding development in the general government balance (chiefly transfers from the EU).

Source: AMNA