The current account surplus nearly doubled in July 2022, according to data provided by the Bank of Greece (BoG), in the month that tourism revenue hit 2019 levels.

Overall, however, the deficit widened even further over the seven-month period, reaching €9.7bn from €6.8bn in the corresponding period of 2021.

Current account balance

In July 2022, the current account surplus increased by 533.9 million euros compared to July 2021 and amounted to 1.1 billion euros.

The increase in the trade balance deficit was due to an increase in imports, which in absolute terms exceeded exports. Exports increased by 40.7% at current prices (4.0% at constant prices) and imports by 39.9% at current prices (16.0% at constant prices). In particular, exports of non-fuel goods increased by 21.9% in current prices (3.8% in comparable prices), while imports of non-fuel goods increased by 22.7% in current prices (14.9% in comparable prices).

The increase in the surplus of the balance of services is associated with an improvement, first of all, in the balance of tourism services and, secondly, in the balance of transport, while reducing the surplus in the balance of other services. Arrivals of non-resident travelers increased by 87.3% and corresponding receipts by 62.7% compared to July 2021. It is noted that in relation to July 2019, arrivals reached 93%, and receipts slightly exceeded the corresponding level. The transport surplus increased due to the improvement in the maritime transport surplus.

The deficit in the balance of primary income narrowed compared to the corresponding month of 2021 due to a decrease in net payments of interest, dividends and profits. The surplus in the balance of secondary income decreased compared to July 2021, mainly due to a decrease in net receipts in the general government balance sheet.

Between January and July 2022, the current account deficit showed an increase of 2.9 billion euros compared to the corresponding period in 2021 and amounted to 9.7 billion euros.

The increase in the trade balance deficit is associated with a large excess of imports over exports. In particular, exports increased by 39.9% at current prices (5.3% at constant prices) and imports by 47.6% at current prices (21.6% at constant prices). In particular, in current prices, exports and imports of non-fuel goods increased by 26.6% and 30.9%, respectively (10% and 22% in comparable prices).

The increase in the positive balance of services is mainly due to the improvement in the balance of tourism services, as well as the balances of transport and other services. Non-resident traveler arrivals increased by 191.4% and qualifying receipts by 154.2% compared to the corresponding period in 2021, representing 87.9% and 97.1% of their respective 2019 levels. Net receipts from transfers increased by 33.4%.

The surplus in the balance of primary income decreased compared to the same period in 2021, mainly due to a decrease in net receipts from other primary income. The surplus in the balance of secondary income widened due to improvements recorded in other sectors of the economy, as well as in the general government sector.

Capital balance

In July 2022, the capital balance recorded a positive balance – compared to a slight deficit in July 2021 – of €475.7 million, mainly due to an increase in net receipts in the general government sector. Between January and July 2022, the capital balance surplus almost tripled compared to the same period in 2021 to €2 billion, mainly due to an increase in general government net receipts.

General current balance and capital balance

In July 2022, the overall current and capital account surplus (in line with the economy’s external financing needs) tripled to €1.6 billion. Between January and July 2022, the overall current account and capital deficit increased by €1.6 billion compared to the corresponding period in 2021 to €7.8 billion.

Balance of financial transactions

In July 2022, in the direct investment category, claims of residents abroad increased by €0.8 billion, while liabilities of residents abroad showed a decrease of €257.7 million without any notable transactions.

In portfolio investments, the increase in residents’ claims to foreign countries was due to an increase by 178.0 million euros in their placements in foreign bonds and bonds and by 144.8 million euros in their placements in shares of non-resident companies. The reduction in their liabilities is almost entirely due to the reduction of non-residents’ positions in Greek bonds and interest-bearing bills by 1.2 billion euros.

In the category of other investments, a decrease in residents’ claims on foreign investments was recorded due to a decrease by EUR 584.0 million of placements of residents in deposits and REPO operations abroad, which was partially offset by a statistical adjustment related to the issuance of banknotes (by EUR 327.0 million) and an increase of 208.7 million euros in loans to non-residents. The increase in their liabilities reflects an increase of €1.0 billion in non-resident deposit and repo placements in Greece (including the TARGET account) and, to a lesser extent, a statistical adjustment related to the issuance of banknotes (by €327.0 million). euros), which were partially offset by a reduction of 160.1 million euros in debt obligations of residents to foreign countries.

Between January and July 2022, in the direct investment category, claims of residents abroad increased by 1.1 billion euros, while liabilities of residents abroad, which correspond to direct investments of non-residents in Greece, increased by 4.1 billion euros.

In portfolio investment, the net increase in residents’ foreign claims is mainly due to a €9.6 billion increase in residents’ placements in bonds and interest-bearing notes abroad. The net increase in their liabilities is almost entirely attributable to a €2.2 billion increase in non-residents’ positions in Greek bonds and interest-bearing notes.

In the category of other investments, the decrease in residents’ claims on foreign countries is associated with a decrease of 4.7 billion euros in residents’ placements on deposits and repos abroad, which was partially offset by a statistical adjustment related to the issuance of banknotes (by 3.1 billion euros) . The increase in their liabilities mainly reflects an increase of €8.6 billion in non-resident deposit and repo placements in Greece (including the TARGET account) and a statistical adjustment related to the issuance of banknotes (by €3.1 billion), which was partly offset a reduction of 3.9 billion euros in their loan obligations to non-residents.

At the end of July 2022, the country’s foreign exchange reserves amounted to 11 billion euros, compared to 9.4 billion euros at the end of July 2021.