Current accounts deficit in first half of 2008

The current accounts deficit rose by 2.378 billion euros in the first half of 2008 against the corresponding period of 2007, reaching 19.136 billion euros, according to figures released on Tuesday by the Bank of Greece (BoG), the country's central bank, which said that the increase reflected increases mainly in the country's trade deficit and, secondarily, in the income balance, which were only partly offset by rises in the surpluses of the current transfers balance and the services balance.

The 3.746 billion euros rise in the overall trade deficit is attributable to increases of 1.945 billion euros, 1.517 billion euros and 284 million euros in the net oil import bill, the trade deficit excluding oil and ships, and net payments for purchases of ships, respectively. Regarding in particular the trade balance excluding oil and ships, export receipts grew by 590 million euros or 9.9%, while the corresponding import bill rose by 2.108 billion euros or 11.3%.

The surplus of the services balance expanded by 528 million euros, largely reflecting higher net transport receipts (up 674 million euros). It should be noted that gross transport receipts (mainly from merchant shipping) increased by 22.3%. Net travel receipts rose by 134 million euros year-on-year, as gross receipts (i.e. travel spending in Greece by non-residents) grew by 278 million euros (or 8.3%), while gross payments (i.e. travel spending abroad by residents of Greece) increased by 143 million euros (or 12.6%). Net payments for other services rose by 281 million euros.

The income account deficit expanded by 584 million euros, exclusively as a result of higher net interest, dividend and profit payments. This development is largely associated with a rise in non-residents' holdings of Greek public debt.

Finally, the large increase of 1.425 billion euros in the surplus of the current transfers balance is attributable mainly to a substantial rise in EU transfers to general government and, secondarily, to a decline in general government payments to the EU.

Yr/yr figures for June 2008

In June, more specifically, the current account deficit grew by 471 million euros year-on-year gainst June 2007, reaching 2.958 billion euros, as a result of the expansion of the trade deficit. By contrast, the income account deficit shrank and the surpluses of the services balance and the current transfers balance rose.

The year-on-year rise of 852 million euros in the overall trade deficit is attributable mainly to an increase of 526 million euros in the trade deficit excluding oil and ships and, secondarily, τ a 329 million euros rise in the net oil import bill, while net payments for purchases of ships remained almost unchanged.

As a result of increases in net travel and transport receipts (up 128 million euros and 121 million euros respectively), the surplus of the services balance grew by 200 million euros. Net payments for other services rose by 50 million euros.

The 170 million euros decline in the income account deficit is attributable to a drop in net dividend and profit payments, which was only partly offset by an increase in net interest payments.

The surplus of the current transfers balance rose slightly by 12 million euros year-on-year, as the net receipts of the other sectors (excluding general government) grew by 35 million euros, while net EU transfers to general government dropped by 23 million euros. (Current transfers from the EU mainly include receipts from the Guarantee Section of the European Agricultural Guidance and Guarantee Fund-EAGGF in the context of the Common Agricultural Policy-CAP, as well as receipts from the European Social Fund, while current transfers to the EU include Greece's contributions-payments to the Community Budget.)

21.08.2008