Tornos News | Greece’s current account deficit falls in January-October 2021 thanks to travel services

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Over the period January-October 2021, the current account deficit fell by 2.7 billion euros over one year and stood at 6.4 billion euros, according to the Bank of Greece.
The rise in the services surplus is mainly due to an improvement in the travel services balance, the bank said. However, this was partly offset by a decline in the surplus in the transport balance. Non-resident arrivals grew 93.8% and the corresponding revenue grew 142.0% year-on-year, accounting for 46% and 58% of respective levels in 2019. Net transportation revenue fell 9.7% .

According to the bank’s press release, in October 2021, the current account deficit widened over one year, due to a deterioration in the balance of goods and the primary and secondary income accounts, which was in decline. part offset by an improvement in the balance of services.
In January-October 2021, the current account deficit narrowed year on year, due to an increase in the services surplus and an improvement in the primary and secondary income accounts, which were partly offset by an increase in the services surplus. deterioration of the balance of goods.

Current account
In October 2021, the current account deficit widened by 45 million euros over one year to stand at 781 million euros.

An increase in the goods balance deficit can be explained by a larger increase in imports than in exports. Exports increased by 44.6% and 6.9% at current and constant prices, respectively, while imports increased by 50.2% and 12.2% at current and constant prices, respectively. In particular, exports of non-oil goods increased by 25.4% and 15.3% at current and constant prices, respectively, and imports of non-oil goods increased by 28.5% and 21.7% at current prices. currents and constants, respectively.

The surplus in the services balance more than doubled, reflecting an improvement mainly in the travel balance and, to a lesser extent, in the transport and other services balance. The arrivals of non-residents and the corresponding receipts increased strongly (respectively by 124.5% and 159.8%). In particular, receipts and arrivals were 98.4% and 77.3%, respectively, from October 2019 levels. The transport surplus increased mainly due to an improvement in the surplus in the balance of maritime transport.

The income account deficit has grown year on year, due to the increase in net payments of interest, dividends and profits. The secondary income account deficit widened year over year, due to the increase in government payments.

Over the period January-October 2021, the current account deficit decreased by 2.7 billion euros over one year and stood at 6.4 billion euros.

An increase in the deficit of the goods balance is due to the fact that imports have increased more than exports in absolute terms. Specifically, exports increased by 34.0% and 13.5% at current and constant prices, respectively, while imports increased by 32.1% at current prices and 10.9% at constant prices, respectively. Specifically, non-oil exports and imports of goods increased at about the same rate (25.7% and 25.6%, respectively) at current prices, while at constant prices they increased by 20, respectively. 0% and 23.0%.

An increase in the services surplus is mainly due to an improvement in the travel services balance; however, this was partly offset by a decline in the transport balance surplus. Non-resident arrivals increased by 93.8% and corresponding revenues by 142.0% year on year, representing 46% and 58% of respective levels in 2019. Net transport revenues decreased by 9.7% .

The primary income account went from being in deficit to in surplus on a year-over-year basis, mainly due to lower net payments of interest, dividends and profits, while the surplus of the secondary income account increased due to an increase in the net revenue of general government.

Capital account
In October 2021, the capital account was in deficit, against a surplus in October 2020, and amounted to 104 million euros. In January-October 2021, the capital account surplus increased by 1.3 billion euros year on year and stood at 3.1 billion euros.

Current account and combined capital
In October 2021, the deficit of the combined current and capital account (corresponding to the external financing needs of the economy) increased compared to October 2020 and stood at 884 million euros. Over the period January-October 2021, the combined current and capital account deficit decreased year on year, from € 7.3 billion to € 3.3 billion.

Financial account
In October 2021, under direct investments, the external assets of residents increased by 24 million euros and the external liabilities of residents increased by 224 million euros, including the completion of the acquisition of a stake additional 16% in Piraeus Port Authority SA by COSCO SHIPPING (Hong Kong) Co., Limited.

Regarding portfolio investments, the decrease in foreign assets of residents is explained by a decrease of 268 million euros in the holdings of residents in foreign bonds and Treasury bills, partially offset by an increase of 207 million euros in their holdings of foreign stocks. A decrease in the external liabilities of residents is due to a decrease of 221 million euros in the holdings of non-residents of Greek government bonds and treasury bills.

Under other investments, the increase in foreign assets of residents mainly reflects a statistical adjustment of 446 million euros related to the issuance of banknotes and an increase of 307 million euros in deposits and pensions of residents abroad . An increase in their commitments represents an increase of 1.6 billion euros in deposits and pensions of non-residents in Greece (TARGET account included).

During the period January-October 2021, under direct investment, the external assets of residents increased by 860 million euros and the external liabilities of residents, which represent the direct investments of non-residents in Greece, increased. of 4.0 billion euros.

In terms of portfolio investments, the increase in foreign assets of residents is mainly explained by an increase of 16.2 billion euros in the holdings of residents of foreign bonds and Treasury bills and an increase of 1.7 billion euros. euros of their holdings of foreign equities. The increase in residents’ external liabilities is due to an increase of 2.7 billion euros in the holdings of non-residents of Greek government bonds and treasury bills and of 1.3 billion euros in the holdings of non-residents. -residents in shares of Greek companies.

Under other investments, the increase in foreign assets of residents reflects an increase of 2.5 billion euros in loans granted to non-residents and a statistical adjustment of 3 billion euros linked to the issuance of banknotes in euros, which were partially offset by declines of 1.3 billion euros in deposits and pensions abroad. An increase in their commitments mainly represents an increase of 12.2 billion euros in deposits and pensions of non-residents in Greece (TARGET account included).

At the end of October 2021, Greece’s reserve assets stood at € 12.3 billion.

RELATED TOPICS: Greece, Greek tourism news, Tourism in Greece, The greek islands, Greece hotels, Travel to greece, Greek destinations, greek travel market, Greek tourism statistics, Greek Tourism Report

Photo source: Wikimedia Commons License: CC-BY-SA Copyright: pixabay.com

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