Greece: Tourism deficit weights economy down

Greece: Tourism deficit weights economy down

“Shattered” appears the… mirror of competitiveness of the Greek economy, and that was the case even before the lockdown. According to the Bank of Greece, the current account balance defcit reached 3.5 billion euro in the first quarter of 2020, with the balance of travel services decreasing, as arrivals of non-resident travelers decreased by 46.8 % and relevant revenue by 71%, due to the stop of air transport and the operation of hotels.

In particular, in March 2020, the current account balance recorded a deficit of 1.1 billion euro, down by 432 million euro compared to March 2019, as a result of the improvement in the balance of goods, primary and secondary incomes. On the contrary, according to the Bank of Greece, the surplus balance of services was reduced.

The deficit of the balance of goods decreased by 319 million euro, due to the improvement of the balance of non-fuel goods and despite the reduction of the relevant exports by 5.4%, as the corresponding imports decreased at a much faster rate, by 12%. These developments are largely due to the cessation of economic activity internationally, due to measures to tackle the pandemic. The fuel balance has not changed significantly. The decrease in exports and imports of fuel is due to the sharp fall in oil prices internationally, while at constant prices exports and imports of fuel increased by 37% and 82% respectively compared to March 2019.

In the first quarter of 2020, the current account deficit improved and stood at 3.5 billion euro, 201 million euro less than in the corresponding period of 2019, as the improvement of the balance of goods and the balance of secondary income outweighed the deterioration of other balances.

The deficit of the balance of goods decreased due to the improvement of the balance of goods, excluding fuel, while the fuel balance deteriorated. Exports of non-fuel goods increased by 4.5% at current prices (5.0% at constant prices), while corresponding imports decreased by 2.5% at current prices and by 2.0% at constant prices. The decrease in exports and imports of fuel is due to the fall in oil prices, while at constant prices, exports and imports of fuel increased by 5.1% and 15.4% respectively./ibna