BoE: Jump in foreign traveler arrivals in June, receipts exceeded 2019 levels

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The current account deficit increased by 3.5 billion euros in the first half of 2022 to 10.8 billion euros, as the Bank of Greece announced today.

For June 2022, the current account deficit narrowed compared to the corresponding month in 2021, with BoE data showing a jump in tourist arrivals and receipts.

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In particular, the arrivals of non-resident travelers increased by 241.5% and the related receipts by 224.5% in relation to June 2021. It is noted that in relation to June 2019 the arrivals amounted to 89.0% and the receipts exceeded the corresponding level.

Current Account Balance

Particularly, in June 2022the current account deficit decreased by 589.2 million euros compared to June 2021 and stood at 722.9 million euros.

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The increase in the goods balance deficit was due to the increase in imports, which was greater than that of exports in absolute terms. Exports increased by 60.3% at current prices (11.7% at constant prices) and imports by 53.0% at current prices (21.6% at constant prices). In particular, exports of non-fuel goods increased by 30.5% at current prices (12.1% at constant prices) and imports of non-fuel goods increased by 26.4% at current prices (16.6% at constant prices ).

The increase in the surplus of the services balance is due to the improvement primarily of the travel services balance and secondarily of the other sub-balances. Non-resident traveler arrivals increased by 241.5% and related receipts by 224.5% compared to June 2021. It is noted that compared to June 2019, arrivals reached 89.0% and receipts exceeded corresponding level. The transport surplus increased due to the improvement in the maritime transport surplus.

The primary income balance deficit increased compared to the corresponding month of 2021, mainly due to the decrease in net receipts from other primary incomes. The balance of secondary income recorded a deficit, compared to a surplus in June 2021, due to the increase in payments in the general government balance.

The first half of 2022the current account deficit showed an increase of 3.5 billion euros compared to the first half of 2021 and stood at 10.8 billion euros.

The increase in the goods balance deficit is due to the greater increase in imports over exports. More specifically, exports increased by 39.8% at current prices (5.5% at constant prices) and imports increased by 49.1% at current prices (22.8% at constant prices). In particular, at current prices exports and imports of non-fuel goods increased by 27.5% and 32.5% respectively (11.1% and 23.3% at constant prices).

The increase in the surplus of the services balance is due to the improvement mainly of the balance of travel services, as well as of the balances of transport and other services. Non-resident traveler arrivals increased by 360.8% and related receipts by 329.3% compared to the corresponding period in 2021, representing 84.9% and 94.7% of their respective levels in 2019. Net receipts from transfers showed an increase of 27.6%.

The surplus of the primary income balance decreased compared to the same period in 2021, mainly due to the decrease in net receipts from other primary incomes. The secondary income balance deficit also decreased, due to the improvement recorded by the other sectors of the economy, as well as the general government sector.

Capital Balance

In June 2022, the capital balance surplus increased by almost half compared to June 2021, due to the increase in net receipts in the other, excluding general government, sectors and stood at €421.8 million. In the first half of 2022, the capital balance surplus more than doubled compared to the same period in 2021 to €1.5 billion, mainly due to an increase in net receipts of the general government sector.

Total Current and Capital Balance

In June 2022, the overall current and capital account deficit (which corresponds to the economy’s external financing needs) narrowed to €301.1 million, from €1.0 billion in June 2021 .In the first half of 2022, the deficit in the total current and capital balance increased by 2.7 billion euros compared to the corresponding period of 2021 and stood at 9.4 billion euros.

Balance of Financial Transactions

In June 2022, in the category of direct investments, residents’ claims against abroad recorded an increase of 43.2 million euros, while residents’ liabilities against abroad showed an increase of 800.6 million euros, with no notable transactions.

In portfolio investments, the increase in residents’ claims against abroad is mainly due to the 1.9 billion euro increase in their investments in foreign bonds and interest-bearing bonds. The increase in their liabilities is almost entirely due to the increase of 182.0 million euros in the placements of non-residents in bonds and interest-bearing bonds of the Greek State.

In the category of other investments, a decrease was recorded in the claims of residents vis-a-vis abroad, due to the decline of 871.0 million euros in placements of residents in deposits and repos abroad, which was partially offset by the statistical adjustment related to the issuance of banknotes (by 525.0 million euros) and the increase by 109.9 million euros in granting loans to non-residents. The increase in their liabilities reflects the €2.4 billion increase in non-resident placements in deposits and repos in Greece (including the TARGET account) and, to a lesser extent, the statistical adjustment related to the issuance of banknotes (by 525 .0 million euros), which were partially compensated by the decrease by 1.7 billion euros of the residents’ debt obligations vis-a-vis abroad.

In the first half of 2022, in the category of direct investments, the claims of residents vis-à-vis abroad increased by 318.5 million euros and the liabilities of residents vis-a-vis abroad, which correspond to direct investments by non-residents in Greece, recorded an increase of 4.3 billion euros.

In portfolio investments, the net increase in residents’ foreign claims is mainly due to the 9.4 billion euro increase in residents’ placements in foreign bonds and interest-bearing bonds. The net increase in their liabilities is almost entirely due to the €3.4 billion increase in non-residents’ placements in Greek government bonds and interest-bearing bills.

In the category of other investments, the decrease in the claims of residents vis-a-vis abroad is due to the fall of 4.1 billion euros in placements of residents in deposits and repos abroad, which was partially offset by the statistical adjustment linked to the issuance of banknotes ( by 2.8 billion euros). The increase in their liabilities mainly reflects the increase by 7.7 billion euros of non-resident placements in deposits and repos in Greece (including the TARGET account) and the statistical adjustment linked to the issuance of banknotes (by 2.8 billion euros). euros), but it was partially compensated by the reduction by 3.8 billion euros of their loan obligations to non-residents.

At the end of June 2022, the country’s foreign exchange reserves stood at 11.0 billion euros, compared to 9.1 billion euros at the end of June 2021.

Source: Capital

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