The current account deficit increased in May 2024, compared with the corresponding month of 2023, mainly due to the deterioration of the goods and primary income balances and, to a lesser extent, the secondary income balance, while the services balance recorded an improvement, according to data released on Monday by the Bank of Greece.

In May 2024, the current account deficit increased year-on-year due to a deterioration mainly in the balance of goods and the primary income account and, to a lesser extent, in the secondary income account, while the balance of services improved.

The primary income account and, to a lesser extent, the balance of goods both worsened from January to May 2024, partially offsetting an improvement in the secondary income account and the balance of services.

CURRENT ACCOUNT

In May 2024, the current account deficit grew by €720.2 million year-on-year and stood at €2.4 billion.

The goods deficit widened, reflecting a larger rise in imports than exports. At current prices, goods exports grew by 2.7% (3.2% at constant prices) and goods imports increased by 7.7% (2.3% at constant prices). More specifically, non-oil goods exports at current prices fell by 6.6% (-10.4% at constant prices) and the corresponding imports dropped by 4.7% (-4.8% at constant prices).

A decrease in the transport surplus partially offset an improvement in the other services balance and, secondarily, the balance of travel services, which caused the services surplus to increase. Compared with May 2023, non-residents’ arrivals grew by 21.3% and the relevant receipts rose by 6.8%.

The deficit in the primary income account increased year-on-year as net receipts from other primary income decreased while net interest, dividends, and profit payments rose. The deficit of the secondary income account deteriorated compared with May 2023, owing to higher general government net payments.

In January–May 2024, the current account deficit increased by €1.7 billion year-on-year and stood at €9.1 billion.

The goods deficit grew as exports dropped and imports increased. At current prices, goods exports fell by 4.1% (6.6% at constant prices) and goods imports grew by 4.3% (5.3% at constant prices). More specifically, non-oil goods exports at current prices declined by 4.1%, while the corresponding imports increased by 5.1% (6.9% and 5.7% at constant prices, respectively).

The services surplus widened, mainly as a result of an improvement in the travel balance and, to a lesser extent, in the other services balance, which was partly offset by a decrease in the transport surplus. Compared with January–May 2023, non-residents’ arrivals increased by 20.6% and the relevant receipts rose by 16.2%.

The deficit of the primary income account grew year-on-year, mainly owing to a decline in net receipts under other primary income. The surplus of the secondary income account increased year-on-year, owing to higher net receipts from other sectors of the economy, excluding general government.

CAPITAL ACCOUNT

In May 2024, the capital account deficit increased year-on-year and stood at €102.0 million, mainly reflecting lower general government net receipts.

In January–May 2024, the capital account showed a deficit, against a surplus in the corresponding period of 2023, which came to €642.2 million, as a result of both a decrease in general government net receipts and a shift from net receipts to net payments in the other sectors of the economy, excluding general government.

CURRENT AND CAPITAL ACCOUNT

In May 2024, the deficit of the combined current and capital account (corresponding to the economy’s external financing requirements) grew against May 2023 and stood at €2.5 billion.

In January–May 2024, the deficit of the combined current and capital account increased year‑on‑year and amounted to €9.7 billion.

FINANCIAL ACCOUNT

In May 2024, direct investment saw net flows of €58.5 million under residents’ external assets and net flows of €103.6 million under residents’ external liabilities, without any notable transactions.

Under portfolio investment, an increase in residents’ external assets is mainly due to a rise of €1.4 billion in residents’ holdings of foreign bonds and Treasury bills. An increase in their liabilities largely reflects a rise of €2.6 billion in non-residents’ holdings of Greek bonds and Treasury bills.

Under other investment, residents’ external assets fell due to a decrease of €1.1 billion in residents’ deposit and repo holdings abroad, partly offset by a €752.0 million statistical adjustment associated with the issuance of banknotes and by a rise of €93.7 million in loans extended to non-residents. An increase in residents’ external liabilities was mainly associated with a €752.0 million statistical adjustment with regard to the issuance of banknotes and, to a lesser extent, with a €278.0 million increase in non-residents’ deposit and repo holdings in Greece (the TARGET account included), which was offset to a degree by a drop of €441.3 million in residents’ outstanding debt to non-residents.

In January–May 2024, direct investment showed a €562.2 million net flow under residents’ external assets and a €1.6 billion net flow under residents’ external liabilities, representing non-residents’ direct investment in Greece.

Under portfolio investment, a rise in residents’ external assets is largely attributable to an increase of €5.2 billion in residents’ holdings of foreign bonds and Treasury bills. A rise in their liabilities is chiefly due to an increase of €6.4 billion in non-residents’ holdings of Greek bonds and Treasury bills and to a rise of €1.7 billion in non-residents’ holdings of Greek equity.

Under other investment, a drop in residents’ external assets is mainly due to a decrease of €5.2 billion in residents’ deposit and repo holdings abroad, which was partly offset by an increase of €410.0 million in loans extended to non-residents. A decrease in residents’ external liabilities is associated with a decline of €2.8 billion in the outstanding debt to non-residents, which was offset to a degree by a rise of €2.5 billion in non-residents’ deposit and repo holdings in Greece (the TARGET account included).

At end of May 2024, Greece’s reserve assets stood at €13.4 billion, compared with €12.5 billion at end of May 2023.