Current Account Surplus Hit by Sharp Fall in Travel Receipts in August

October 21, 2020

ATHENS — The Greek current account showed a small surplus of 80 million euros in August reflecting a sharp fall in net travel receipts in the month, against a surplus of 1.8 billion in August 2019, the Bank of Greece said on Wednesday.

The central bank attributed this development to a significant deterioration in the services balance, which was only partly offset by improvements in the balance of goods and the primary and secondary income accounts. 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 73.3 pct and 66.5 pct, respectively, year-on-year. Moreover, the transport balance also worsened, as a result of lower net sea and air transport receipts.

A 468 million euros year-on-year decrease in the deficit of the balance of goods is mostly attributable to a decline in the deficit 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 increased marginally at constant prices, while the corresponding imports fell by 11.5 pct.

In the January-August period, the current account showed a deficit of 7.9 billion euros, up by 6.9 billion year-on-year. This development is exclusively due to a decline in the services surplus, which was partly offset by a 3.1 billion euros drop in the balance of goods deficit as well as the 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 13.3 pct at current prices, but grew by 2.3 pct at constant prices. Total imports of goods decreased by 16 pct at current prices (-6.2 pct at constant prices). It should be noted that the drop in exports and imports at current prices is largely due to a decline in 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 79.7 pct and non-residents’ arrivals by 78.0 pct year-on-year, while transport receipts decreased by 14.5 pct.

At the end of August 2020, Greece's reserve assets stood at 9.6 billion euros, compared with 7.5 billion at end-August 2019.


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