Greece: Current account balance deficit records notable improvement in 2019

Greece: Current account balance deficit records notable improvement in 2019

The current account deficit in achieved significant improvement in 2019, as Bank of Greece data indicate a 50% drop from 2018, to reach € 2.6 billion. At the same time, travel incomes totaled 18.15 billion euros in 2019, compared with 16.08 billion euros in 2018 and 16.63 billion euros in 2017.

According to the relevant data, this development is mainly due to the increase in the services balance surplus as well as to the recording of surplus, against the deficit, in the secondary income balance. At the same time, the deficit in the primary income balance was also reduced.

These developments offset the widening of the goods balance deficit, which mainly stemmed from the widening of the deficit on goods without a fuel balance, while the fuel balance deficit narrowed. Exports of non-fuel goods increased (4.5% at current and 4.9% at constant prices) at a faster rate than their respective imports (3.7% at both current and fixed prices). However, total exports and imports remained virtually unchanged, due to the decline in exports and fuel imports.

The surplus in the services balance primarily derived from the improvement of the travel services balance and, secondarily, from the transports balance, whilst an increase in the other services deficit was noted. Travel and non-resident arrivals increased by 12.8% and 4.1% respectively in 2018. Transport revenue, mainly maritime, increased by 3%.

Revenue

The deficit in the primary income balance was reduced due to the reduction in net interest, dividend and profit payments, offsetting the reduction in the surplus in other income. Finally, the secondary income balance recorded a surplus against a deficit in 2018, following the increase in net general government sector receipts linked to the ESM returns on Greek bond profits (SMP / ANFA) in May and December 2019.

Specifically, for December 2019 the current account deficit was reduced by EUR 974 million compared to December 2018 and amounted to EUR 540 million. This development is mainly due to the improvement in the secondary income balance, which came from the increase in general government revenues due to the payment of the second tranche of the European Stability Mechanism (ESM). gains from the Greek government bonds held by the Eurosystem (SMP / ANFA) in the medium-term debt relief measures. /ibna