Current account balance

In November 2002, the current account balance recorded a Euro 1,471 million deficit, Euro 141 million higher than in November 2001. This increase resulted mainly from the widening of the non-oil trade deficit and, to a lesser extent, from the fall in the services surplus. By contrast, the transfers surplus grew and the income account deficit decreased.

The widening of the trade deficit was accounted for by the rise in the non-oil import bill and the fall in non-oil export receipts. The net oil import bill remained approximately at November 2001 levels. The decrease in the services surplus mainly resulted from the apparent drop in net travel receipts. It should be recalled at this point that, as from May 2002, travel receipts and payments are calculated on the basis of a sample survey (‘‘border survey''), hence data are not fully comparable with those for previous periods. Specifically, the big reduction observed in November 2002 in recorded travel receipts as well as payments is largely attributable to the fact that they reflect expenditure incurred by travellers in November 2002, while in 2001, due to the method then applied, the relevant flows recorded through the banking system for the reference month may have included travellers' expenditure incurred in previous months. The income account deficit was reduced in November 2002, mainly because of the decrease in net payments for interest, dividends and profits. Finally, the increase in the transfers surplus reflects the rise in net receipts of general government from the EU in that month.

During the January-November 2002 period, the current account deficit grew by Euro 791 million, compared with that in the corresponding 2001 period, and came to Euro 7,851 million. This development reflects mainly the narrowing of the transfers surplus and the widening of the trade deficit, which was connected to a rise in both the non-oil trade deficit and the net oil import bill. A small increase was also recorded in the income account deficit. These developments were only partly offset by the considerable rise in the services surplus.

The non-oil trade deficit grew by Euro 568 million during the January-November 2002 period, as a result of the considerable reduction (of Euro 647 million) in export receipts and despite the small decrease (of Euro 80 million) in the import bill. At the same time, net oil imports rose by Euro 318 million. Over the period under review, the services surplus increased, as the fall in net transport receipts was more than offset by the apparent considerable rise in net receipts from travel and other services, which is partly due to the aforementioned change in the methodology of recording travel receipts and payments. The income account deficit rose slightly, mainly because of the fall in net receipts from fees and wages. Finally, the decrease in the transfers surplus over the entire January-November 2002 period is attributable to the drop in the net receipts of "other" (non-general government) sectors, to the rise in general government payments and, to a lesser extent, to the reduction in EU transfers. It should be recalled that, as from September 2002, general government receipts from, and payments to, the EU are recorded separately (and not on a "net" basis, as was the case in the past). Back data have been revised accordingly, so as to be comparable with new data.

Financial account balance

In November 2002, flows of both residents' direct investment abroad and non-residents' direct investment in Greece were small. Under portfolio investment, a net inflow of Euro 1,473 million was recorded, which mainly reflects non-residents' investment in Greek bonds. As regards "other investment", a small net inflow of Euro 82 million was recorded, connected mainly to the increase in deposits and repo holdings by non-residents, which was almost offset by the increase in residents' deposits abroad and the outflow for repayment of general government loans.

During the January-November 2002 period, direct investment recorded net outflows of Euro 517 million, mainly attributable to residents' investment abroad. During the period under review, there was a substantial net inflow (of Euro 10,983 million) for portfolio investment, connected with the considerable inflow of foreign investors' funds, mainly for the purchase of Greek bonds and, to a lesser extent, for the purchase of shares. The outflow of funds for the purchase of, mainly, foreign bonds by Greek investors is also considerable. The continuing shift of both foreign and Greek investors to the bond market reflects the cautiousness with which investors still view developments in the international capital markets. Finally, "other investment" recorded a small net outflow of Euro 32 million. This development is connected to a significant increase in assets, which, however, was almost fully offset by a corresponding increase in liabilities. The considerable rise in deposits and repo holdings by non-residents and residents, respectively, is the main reason of both increases. It should also be noted, as far as liabilities are concerned, that repayment of general government loans was quite substantial.

At end-November 2002, Greece's reserve assets came to Euro 9.1 billion euro. (It should be recalled that, since Greece joined the euro area in January 2001, reserve assets, as defined by the European Central Bank, include only monetary gold, the "reserve position" at the IMF, "Special Drawing Rights", and Bank of Greece's claims in foreign currency on residents of non-euro area countries. Conversely, reserve assets do not include claims in euro on residents of non-euro area countries, claims in foreign currency and in euro on residents of euro area countries, and the Bank of Greece participation in the capital and the reserve assets of the ECB.)

Note: Balance of payments data for December 2002 will be released on 14 February 2003.

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