In March 2024, the current account deficit rose year-on-year due to a deterioration in the secondary income account and, to a lesser extent, in the goods and services balances, while the primary income account improved, according to data released by the Bank of Greece. 

The primary income account and the balance of goods both declined in the first quarter of 2024, which partially offset an improvement in the secondary income account and, to a lesser extent, in the balance of services. As a result, the current account deficit increased year over year.

CURRENT ACCOUNT

In March 2024, the current account deficit recorded an increase of €296.8 million year-on-year and stood at €2.7 billion.

As a result of lower imports almost completely offsetting the decline in exports, the deficit in the goods balance increased slightly. At current prices, exports fell by 11.4% (14.9% at constant prices) and imports decreased by 7.4% (-5.3% at constant prices). More specifically, non-oil exports of goods at current prices fell by 16.4% (18.8% at constant prices), while the corresponding imports dropped by 2.0% (-1.2% at constant prices).

A change in the other services balance from net receipts to net payments is to blame for a slight decrease in the services surplus, but an improvement in the transport and travel balances partially offset this. Compared with March 2023, non-residents’ arrivals rose by 31.2% and the relevant receipts grew by 34.2%.

The deficit of the primary income account contracted year-on-year, reflecting chiefly an increase in net receipts from other primary income and secondarily a decrease in net interest, dividends, and profit payments. The secondary income account recorded a deficit against a surplus in March 2023, as net payments were recorded in general government instead of net receipts [1].

In the first quarter of 2024, the current account deficit recorded an increase of €255.3 million year-on-year and stood at €4.2 billion. The goods deficit grew, reflecting a larger drop in exports than in imports. At current prices, exports fell by 10.7% (11.4% at constant prices) and imports decreased by 1.9% (+1.5% at constant prices). More specifically, non-oil goods exports at current prices declined by 9.0%, while the corresponding imports increased by 3.0% (11.0% and 3.9% at constant prices, respectively).

A rise in the services surplus is due to an improvement in both the travel balance and the transport balance, while the surplus of the other services balance declined. Compared with the first quarter of 2023, non-residents’ arrivals rose by 24.5%, and the relevant receipts grew by 28.2%.

The primary income account registered a deficit against a surplus in the first quarter of 2023, mainly owing to a drop in net receipts from other primary income. The secondary income account surplus increased significantly year-on-year during this period as a result of higher net receipts in other sectors of the economy, excluding general government.

CAPITAL ACCOUNT

In March 2024, the capital account showed a deficit, against a surplus in March 2023, and stood at €108.5 million, reflecting net payments instead of net receipts, recorded mainly in the other sectors of the economy.

In the first quarter of 2024, the capital account showed a deficit, against a surplus in the corresponding period of 2023, standing at €424.9 million, mainly due to a decrease in general government net receipts.

COMBINED ACCOUNT

In March 2024, the deficit of the combined current and capital account (corresponding to the economy’s external financing requirements) grew against March 2023 and stood at €2.8 billion.

In the first quarter of 2024, the deficit of the combined current and capital account more than doubled year-on-year and stood at €4.6 billion.

FINANCIAL ACCOUNT

In March 2024, direct investment saw net flows of €158.8 million under residents’ external assets and net flows of €300.1 million under residents’ external liabilities, without any notable transactions.

Under portfolio investment, an increase in residents’ external assets is mainly attributable to a rise of €707.0 million in residents’ holdings of foreign bonds and Treasury bills. Their liabilities decreased as a result of non-residents' holdings of Greek bonds and Treasury bills declining by €1.3 billion, partially offsetting an increase in non-residents' holdings of Greek equity.

Under other investment, a rise in residents’ external assets stemmed from a €322.0 million statistical adjustment associated with the issuance of banknotes, as well as a €203.5 million increase in non-residents’ loans to residents. Residents' external liabilities went up because non-residents' deposit and repo holdings in Greece (including the TARGET account) went up by €3.3 billion. There was also a statistical adjustment of €322.0 million related to the printing of banknotes, which somewhat balanced out the rise in residents' external liabilities. On the other hand, residents' outstanding debt to non-residents went down by €215.3 million.

In the first quarter of 2024, direct investment showed a €443.3 million flow into residents’ external assets and a €1.2 billion flow into residents’ external liabilities, representing non-residents’ direct investment in Greece.

Under portfolio investment, an increase in residents’ external assets is mainly due to a rise of €2.0 billion in residents’ holdings of foreign bonds and Treasury bills. An increase in their liabilities largely reflects a rise of €3.7 billion in non-residents’ holdings of Greek bonds and Treasury bills.

Under other investment, a drop in residents’ external assets is mainly due to a decline of €2.6 billion in residents’ deposit and repo holdings abroad and, to a lesser extent, a €968.0 million statistical adjustment associated with the issuance of banknotes. A decline in their liabilities is mainly associated with a decrease of €1.9 billion in their outstanding debt to non-residents and, to a lesser extent, a drop of €874.0 million in non-residents’ deposit and repo holdings in Greece (including the TARGET account), as well as a €968.0 million statistical adjustment related to the issuance of banknotes.

At the end of March 2024, Greece’s reserve assets stood at €13.0 billion, compared with €12.1 billion at the end of March 2023.