BoG: Current account deficit increased in the first quarter

In the first quarter of 2022, the current account deficit increased compared to the same period in 2021, mainly due to the deterioration of the goods balance and, to a lesser extent, the primary and secondary income balances, which was to some extent covered by the increase of the services surplus, as announced today by the Bank of Greece.

For March 2022, the current account deficit increased compared to the corresponding month of 2021, mainly due to the deterioration of the primary and secondary income balances and the increase in the balance of goods deficit, which were offset by a partial offset. services.

In detail, as reported by the BoG, in March 2022the current account deficit increased by 880.9 million euros compared to the corresponding month of 2021 and amounted to 2.3 billion euros.

The increase in the goods deficit is due to the increase in imports, which was higher – in absolute terms – than in exports. Exports increased by 34.3% at current prices (and marginally by 0.7% at constant prices) and imports by 27.9% at current prices (9.2% at constant prices). In particular, exports of non-fuel goods increased by 23.4% at current prices (6.4% at constant prices) and imports of non-fuel goods increased by 22.2% at current prices (14.0% at constant prices). ).

The increase in the services surplus is due to the improvement of all individual balances. Arrivals of non-resident travelers increased by 318.9% and related receipts by 404.3% compared to 2021. The surplus of the transport balance increased due to the improvement of the maritime transport balance.

The primary income balance recorded a deficit, compared to a surplus in the corresponding month of 2021, due to the reduction of receipts from other primary incomes. The secondary income balance deficit more than doubled compared to the corresponding month of 2021, due to the reduction of general government revenues.

The first quarter of 2022the current account deficit increased by 3.8 billion euros compared to the first quarter of 2021 and amounted to 6.4 billion euros.

The increase in the goods deficit is due to the larger and faster increase in imports compared to exports. More specifically, exports increased by 32% at current prices (4.9% at constant prices) and imports increased by 47.9% at current prices (23.2% at constant prices). In particular, at current prices, exports and imports of non-fuel goods increased by 24.6% and 32.9%, respectively (10.7% and 24.2% at constant prices).

The increase in the services surplus is due primarily to the improvement of the travel services balance and secondarily to the transport and other services balances. Arrivals of non-resident travelers increased by 295.8% and related receipts by 342.2% compared to the first quarter of 2021 (representing 55.4% and 62.9% of the respective levels of 2019). Net receipts from transfers increased by 5.8%.

The surplus of the primary income balance decreased in relation to the same period of 2021, mainly due to the decrease of the net receipts from other primary incomes. The surplus of the secondary income balance decreased slightly due to the increase in net payments in the general government sector, which was partially offset by the increase in net revenues from other sectors.

Capital Balance

In March 2022, the capital balance recorded a surplus, compared to a deficit in the corresponding month of 2021, and amounted to 76.3 million euros. In the first quarter of 2022, the capital balance showed a deficit of 117.9 million euros, compared to a surplus in the corresponding period of 2021.

Total Balance of Current Transactions and Capital

In March 2022, the total current account and capital deficit (which corresponds to the needs of the economy for foreign financing) increased by 516.4 million compared to March 2021 and amounted to 2.3 billion . euro. In the first quarter of 2022, the total current account and capital deficit widened compared to 2021 by 4.1 billion euros, reaching 6.6 billion euros.

Financial Transaction Balance

In March 2022, in the category of direct investments, residents ‘receivables from abroad increased by 81.9 million euros, while residents’ liabilities to foreigners increased by 803.9 million euros, with the main transactions being the sale of EURONET MERCHANT SERVICES to EFT SERVICES HOLDINGS BV (Netherlands) and the sale and transfer of all National Insurance shares owned by the NBG to CVC ‘s newly established subsidiary Ethniki Holdings Sarl (Luxembourg).

In portfolio investment, the increase in residents’ receivables from abroad is due to the increase of 327 million euros in their investments in financial derivatives, which was partially offset by the decrease by 167 million euros in their holdings in bonds and foreign bonds. . The reduction of their liabilities is mainly due to the reduction of non-residents’ investments in bonds and interest-bearing bills of the Greek State by 904 million euros.

In the category of other investments, there was a decrease in residents’ receivables from abroad due to the decrease in their deposits and repos abroad by 578.0 million euros and the decrease in lending to non-residents, which were partially offset by the statistics. adjustment associated with the issue of banknotes. The increase in their liabilities is mainly due to the increase by € 3.2 billion of non-residents’ deposits and deposits in Greece (including the TARGET account) and the statistical adjustment for the issuance of banknotes by € 657.0 million, which were partially offset by the reduction of loans to resident companies from abroad by € 930.0 million.

In the first quarter of 2022, in the category of direct investments, residents ‘receivables from abroad increased by 135.2 million euros and residents’ liabilities to foreigners, corresponding to direct investments of non-residents in Greece, increased by 2.5 billion euros.

In portfolio investments, the increase in residents ‘receivables from abroad is mainly due to the increase by 5.1 billion euros of residents’ investments in bonds and bonds abroad. The increase in their liabilities is due to the increase in non-resident placements in bonds and interest-bearing bills of the Greek State by 1.1 billion euros.

In the category of other investments, the decrease in residents ‘receivables from abroad is mainly due to the decrease by € 3.3 billion of residents’ investments in deposits and repos abroad. The increase in their liabilities mainly reflects the increase of 5.7 billion euros of non-resident deposits and deposits in Greece (including the TARGET account) and the statistical adjustment associated with the issuance of banknotes by 1.7 billion euros. .

At the end of March 2022, the country’s foreign exchange reserves amounted to 13.1 billion euros.