Greek current account deficit shrank 51 pct in Q1

The central bank, in a report, attributed this positive development to a reduction of the country’s trade deficit by 1.35 billion euros in the January-March period, as exports receipts grew 4.1 pct and import payments fell by 5.2 pct in the three-month period.

In March 2013, the current account balance showed a deficit

of 1.3 billion euros, down by 952 million (or 42.5 pct) year-on-year. This development is mainly due to declines in the trade deficit and the income account deficit.

The trade deficit contracted by 365 million euros, mainly as a result of a 377 million decrease in the net oil import bill. Net payments for purchases of ships increased by 26 million euros and the trade deficit excluding oil and ships shrank by a mere 14.5 million euros on the back of a lower import bill (down by 91 million or 5.0 pct), while the corresponding export receipts fell in March (by 77 million or 6.6 pct).

In the first quarter of 2013, the current account deficit contracted by 2.5 billion euros or 51.2 pct year-on-year, to 2.3 billion. This development principally reflects significant declines (of 1.35 billion and 806 million) in both the trade deficit and the income account deficit, respectively, as well as a concurrent increase of 324 million in the current transfers surplus, while the services surplus fell by 16 million.

In more detail, the trade deficit shrank on account of a 449 million (or 18.9 pct) decrease in the trade deficit excluding oil and ships, lower net payments for purchases of ships by 57 million (or 15.9 pct) and a lower net oil import bill by 844 million (or 26.8 pct). Receipts from exports of goods excluding oil and ships rose by 4.1 pct, while the corresponding import bill fell by 5.6 pct.

A contraction in the services surplus in the first quarter of 2013 is mainly attributed to a drop in net transport receipts, which offset an improvement in the travel balance and lower net payments for other services. The income account deficit fell by 806 million year-on-year, mainly owing to a sharp decline in net interest payments on Greek government bonds held by non-residents (following the PSI).

Finally, the current transfers balance showed a surplus of 1.7 billion euros, up by 324 million year-on-year.

In the first quarter of 2013, the capital transfers balance showed a surplus of 1.1 billion euros, up by 39 million year-on-year. This mainly reflects increased net EU capital transfers to general government.

The overall transfers balance (current transfers plus capital transfers) recorded a surplus of 2.8 billion in the first quarter of 2013, up by 363 million year-on-year, reflecting the above-mentioned development in EU current transfers.

In the January-March 2013 period, direct investment showed a net inflow of 1.3 billion euros (against a net outflow of 518 million in the same period of 2012). Under portfolio investment, a net inflow of 543 million was observed (against a net outflow of 37.0 billion in the same period of 2012).

Under “other” investment, a net outflow of 1.7 billion euros (against a net inflow of 42.5 billion in the first quarter of 2012) is almost exclusively attributable to a 23.2 billion decrease in non-resident credit institutions’ and institutional investors’ deposit and repo holdings in Greece (outflow).

At end-March 2013, Greece’s reserve assets stood at 5.5 billion euros.

Source: AMNA