Bank of Greece

11/20/2020 | Press release | Distributed by Public on 11/20/2020 03:21

Balance of payments: September 2020

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Balance of payments: September 2020

20/11/2020 - Press Releases

Current account

In September 2020, the current account showed a deficit of €499 million, against a surplus of €914 million in September 2019, due to a significant deterioration in the services balance, which was only partly offset by the improved balance of goods and primary and secondary income accounts.

A €498 million year-on-year decrease in the deficit of the balance of goods is mostly attributable to a reversal of the oil balance, which is associated with lower international oil prices. The non-oil balance of goods also improved slightly. It should be noted that total exports of goods fell by 11.7% at current prices (up by 7.4% at constant prices), while the corresponding exports fell by 17.4% at current prices (-6.8% at constant prices).

A decrease in the services surplus is mainly accounted for by lower net travel receipts, as non-residents' arrivals and the corresponding receipts fell by 73.9% and 71.4%, respectively, year-on-year. The transport balance also worsened, as a result of lower net sea and air transport receipts.

The primary income account registered a small surplus, against a deficit in September 2019, mainly as a result of an improvement in the other primary income account. The deficit in the secondary income account declined, mainly due to the improved balance of other (excluding general government) sectors.

In the January-September 2020 period, the current account showed a deficit of €8.6 billion, up by €8.5 billion year-on-year. This development is exclusively due to a decline in the services surplus, which was partly offset by a €3.3 billion drop in the balance of goods deficit, as well as an improvement in the primary and secondary income accounts.

The decrease in the deficit of the balance of goods is accounted for by a larger decline in imports, in absolute terms, than in exports. Specifically, total exports of goods fell by 13.1% at current prices, but grew by 2.8% at constant prices. Total imports of goods decreased by 15.6% at current prices (-5.5% at constant prices). It should be noted that the drop in exports and imports at current prices is largely due to a decline in the value of oil exports and imports, respectively, as a result of lower international oil prices.

The significant decrease in the services surplus is chiefly attributable to a deterioration in the travel services balance, as well as the other individual components. Travel receipts dropped by 78.2% and non-residents' arrivals by 77.2% year-on-year, while transport receipts decreased by 16.2%.

Capital account

In September 2020, the deficit of the capital account widened year-on-year. In the January-September 2020 period, the capital account surplus registered a large increase of €1.1 billion year-on-year, owing to a rise in EU capital transfers to the general government.

Combined current and capital account

In September 2020, the combined current and capital account (corresponding to the economy's external financing requirements) showed a deficit of €587 million, against a surplus of €867 million year-on-year. In the January-September 2020 period, the combined current and capital account recorded a deficit of €7.3 billion, against a surplus of €124 million year-on-year.

Financial account

In September 2020, under direct investment, residents' external assets rose by €54 million. Residents' external liabilities grew by €166 million.

Under portfolio investment, an increase in residents' external assets is mainly due to a rise of €568 million in residents' holdings of foreign bonds and Treasury bills. An increase in their liabilities is mainly due to a rise of €1.3 billion in non-residents' holdings of Greek government bonds and Treasury bills.

Under other investment, an increase in residents' external assets mainly reflects a rise of €1.1 billion in residents' deposit and repo holdings abroad. An increase in residents' external liabilities mostly reflects a rise of €1.3 billion in non-residents' deposit and repo holdings in Greece (the TARGET account included).

In the January-September 2020 period, under direct investment, residents' external assets rose by €495 million and residents' external liabilities, which represent non-residents' direct investment in Greece, increased by €2.4 billion.

Under portfolio investment, a net rise in residents' external assets is due to an increase of €33 billion in residents' holdings of foreign bonds and Treasury bills. A net decline in residents' external liabilities is mainly due to a decrease of €8.2 billion in non-residents' holdings of Greek government bonds and Treasury bills.[1]

Under other investment, a net rise in residents' external assets reflects mainly an increase (by €2.5 billion) in the statistical adjustment associated with the issuance of banknotes. A net rise in residents' liabilities reflects chiefly an increase of €41.9 billion in non-residents' deposit and repo holdings in Greece (the TARGET account included), as well as a €6.2 billion rise in the outstanding debt to non-residents.

At end-September 2020, Greece's reserve assets stood at €9.6 billion, compared with €7.5 billion at end-September 2019, mainly on account of valuation changes, which is partially linked to the appreciation of the euro.

Note: Balance of payments statistics for October 2020 will be released on 21 December 2020.


[1] It is pointed out that developments under portfolio and other investment were largely driven by loan securitisations carried out by systemic credit institutions.