Balance of Payments: August 2021

21/10/2021 - Press Releases

• In August 2021, the current account registered a surplus, against a deficit in the same month a year earlier, due to an improvement in the services balance and the secondary income account, which was partly offset by a deterioration in the balance of goods and the primary income account.
• In January‑August 2021, the current account deficit dropped year‑on‑year, due to an increase in the services surplus and an improvement of the primary and secondary income accounts, which were partly offset by a deterioration in the balance of goods.

Current account

In August 2021, the current account registered a surplus of €1.4 billion, against a €151 million deficit in August 2020.

The rise in the deficit of the balance of goods is accounted for by a larger increase in imports than in exports. Exports increased by 36.1% and 11.9% at current and constant prices, respectively, while imports rose by 40.7% and 18.6% at current and constant prices, respectively. In particular, non‑oil exports of goods grew by 29.5% and 21.9% at current and constant prices, respectively, and non‑oil imports of goods increased by 32.6% and 28.5% at current and constant prices, respectively.

The surplus of the services balance grew, reflecting an improvement of mainly the travel balance and, to a lesser extent, of the transport balance. Non‑residents' arrivals and relevant receipts registered a remarkable increase (at about the same pace: 125%). More specifically, receipts turned out at 75.8% of their level in August 2019. The surplus of the transport balance grew mainly on the back of an improvement in the surplus of the sea transport balance. Lastly, the deficit of the other services balance increased.

The deficit of the primary income account rose, due to a year‑on‑year drop in net receipts from other primary income. The secondary income account improved year‑on‑year, as net general government receipts increased, chiefly on account of the disbursement of a pre‑financing payment under the Recovery and Resilience Facility (RRF).

In the January‑August 2021 period, the current account deficit recorded a decrease of €2.5 billion year‑on‑year and stood at €5.4 billion.

A rise in the deficit of the balance of goods is due to the fact that imports increased more than exports in absolute terms. In more detail, exports grew by 30.3% and 13.5% at current and constant prices, respectively, while imports rose by 27.2% at current prices and by 9.2% at constant prices. Specifically, non‑oil exports and imports of goods grew almost at the same rate (around 24%) at current prices; at constant prices they increased by 19.7% and 22.8%, respectively.

A rise in the services surplus is primarily due to an improvement of the travel services balance; however, this was partly offset by a decline in the surplus of the transport balance. Non‑residents' arrivals grew by 79.2% and relevant receipts by 135.7% year‑on‑year, accounting for half the receipts in 2019. Net transport receipts dropped by 18.6%.

The primary income account turned from deficit to surplus year‑on‑year, mainly owing to lower interest, dividend and profit net payments, while the surplus of the secondary income account rose due to an increase in general government net receipts.

Capital account

In August 2021, the capital account surplus almost tripled year‑on‑year, chiefly as a result of the disbursement of a pre‑financing payment under the RRF, and stood at €2.4 billion. In the January‑August 2021 period, the capital account surplus more than doubled year‑on‑year, to stand at €3.0 billion.

Combined current and capital account

In August 2021, the surplus of the combined current and capital account (corresponding to the economy's external financing requirements) increased by €3.1 billion relative to August 2020 and stood at €3.8 billion, owing to total RRF disbursements described above. In the January‑August 2021 period, the deficit of the combined current and capital account fell year‑on‑year, from €6.5 billion to €2.4 billion.

Financial account

In August 2021, under direct investment, residents' external assets increased by €98 million and residents' external liabilities rose by €409 million.

Under portfolio investment, an increase in residents' external assets is almost exclusively attributable to a rise of €2.3 billion in residents' holdings of foreign bonds and Treasury bills. A decrease in residents' external liabilities is due to a drop of €622 million in non‑residents' holdings of Greek government bonds and Treasury bills.

Under other investment, a rise in residents' external assets reflects a statistical adjustment of €543 million associated with the issuance of banknotes and an increase of €371 million in residents' deposits and repo holdings abroad. A rise in residents' external liabilities is attributable to a net increase of €2.8 billion in liabilities associated with a new allocation of Special Drawing Rights (SDR) by the International Monetary Fund (IMF) and a rise of €1.6 billion in residents' external debt liabilities (including the disbursement of the pre‑financing payment - in the form of loans - under the RRF), which were partly offset by a decrease of €1.7 billion in non‑residents' deposits and repo holdings in Greece (the TARGET account included).

In the January‑August 2021 period, under direct investment, residents' external assets increased by €746 million and residents' external liabilities, which represent non‑residents' direct investment in Greece, rose by €3.5 billion.

Under portfolio investment, an increase in residents' external assets is chiefly attributable to a rise of €16.8 billion in residents' holdings of foreign bonds and Treasury bills. An increase in residents' external liabilities is due to a rise of €1.3 billion in non‑residents' holdings of shares of Greek firms and an increase of €684 million in non‑residents' holdings of Greek government bonds and Treasury bills.

Under other investment, a rise in residents' external assets reflects an increase of €2.8 billion in loans extended to non‑residents, which was partly offset by a decrease of €1.3 billion in residents' deposit and repo holdings abroad. An increase in their liabilities represents mainly a rise of €16.4 billion in non‑residents' deposit and repo holdings in Greece (the TARGET account included).

At end‑August 2021, Greece's reserve assets stood at €12.1 billion, recording an increase of around €2.6 billion compared with end‑August 2020, mainly due to the IMF's new SDR allocation.

Related information: Balance of Payments data for September 2021 will be released on 19 November 2021.

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Balance of Payments Table

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