REPORTERNET.COM

Greece’s current account deficit fell by €1.9 billion, or 8.3%, in 2011, year-on-year, to €21.1 billion. This chiefly reflected a substantial decline of €3.6 billion in the non-oil trade deficit and a rise in the surplus of the services balance (by €1.4 billion) and in the current transfers surplus (by €0.4 billion), which more than offset a large increase in the net oil import bill and a widening of the income account deficit, the Bank of Greece said in a press release of Monday.

The overall trade deficit shrank by €1.1 billion, as a result of a €3.2 billion (or 19.9%) decrease in the trade deficit excluding oil and ships and a €0.4 billion fall in net payments for purchases of ships. By contrast, the net oil import bill rose by €2.5 billion. It is particularly positive that receipts from exports of goods excluding oil and ships rose at a high rate (by 17.3%). However, the corresponding import bill registered a rather limited decline (only by 4.5%).

The increase in the surplus of the services balance reflects higher net travel receipts and lower net payments for “other” services, which more than offset a contraction in net transport receipts. More specifically, travel spending by non-residents in Greece grew markedly (by 9.5%) year-on-year, while travel spending by residents abroad rose by only 5.4%. According to data from the Bank of Greece’s border survey, in 2011 non-residents’ arrivals rose at an average annual rate of 9.5%. During the same year, gross transport receipts (chiefly from merchant shipping) fell by 8.6% and the corresponding payments dropped by 11.3%; as a result, net receipts shrank by €400 million.

The income account deficit rose by €923 million year-on-year, almost exclusively due to higher net payments for interest, dividends and profits (up by 10.3%).

Finally, the current transfers balance showed a surplus of €579 million, up by €380 million compared with 2010. This development is due to the fact that general government net transfer receipts (mainly from the EU) rose by €441 million, offsetting by far the €61 million rise in net transfer payments of sectors other than general government (chiefly emigrants’ remittances).