Cur­rent ac­count bal­ance suf­fers

Cap­i­tal con­trols have a huge im­pact on ser­vice ex­ports, tre­bling the deficit recorded in May year-on-year

Kathimerini English - - Focus -

The im­pact on the econ­omy from the cap­i­tal con­trols im­posed by the gov­ern­ment just over a year ago is be­com­ing in­creas­ingly ap­par­ent.

Data pub­lished yes­ter­day by the Bank of Greece showed that in May, the cur­rent ac­count deficit al­most tre­bled on an an­nual ba­sis due to the re­duc­tion in ser­vice ex­ports.

The Greek cur­rent ac­count bal­ance posted a deficit of 412 mil­lion eu­ros in May 2016, up by 272 mil­lion eu­ros from May 2015, the data re­vealed. This was mainly due to the re­duc­tion by 442 mil­lion of the ser­vices bal­ance sur­plus, pri­mar­ily be­cause of the fall in net rev­enues from mar­itime trans­port ser­vices, which came to 339 mil­lion eu­ros, against 672 mil­lion eu­ros a year ear­lier.

Tak­ings from travel ser­vices recorded a de­cline of 10.4 per­cent year-on-year in May, in spite of the in­crease in the ar­rivals of for­eign tourists, which amounted to 4.4 per­cent. Con­se­quently, the travel bal­ance showed a de­te­ri­o­ra­tion in May.

In the first five months of the year the bal­ance of cur­rent ac­counts ac­tu­ally recorded an im­prove­ment but this is mainly due to the fact that Greece had smaller obli­ga­tions in in­ter­est pay­ment to cover, and paid less to­wards salaries and pen­sions, thereby off­set­ting the losses from travel rev­enues and ex­ports.

In the pe­riod from Jan­uary to May, the Greek cur­rent ac­counts posted a sur­plus of 884 mil­lion eu­ros, while in the first five months of 2015 they had recorded a deficit of 3.5 bil­lion eu­ros. The sur­plus of the ser­vices bal­ances came down to 1.3 bil­lion eu­ros as a re­sult of the sig­nif­i­cant shrink­ing in the net col­lec­tions from trans­port, which in turn was mainly due to the lim­i­ta­tions from the cap­i­tal con­trols.

There was also a de­cline in net 1.1015 rev­enues from travel ser­vices: The to­tal num­ber of for­eign tourism ar­rivals recorded an an­nual de­cline of 1.3 per­cent in the year to endMay, while travel tak­ings shrank by 6.2 per­cent. The bal­ance of pri­mary in­comes posted a sur­plus of 1 bil­lion eu­ros – an im­prove­ment of 715 mil­lion eu­ros from the same pe­riod in 2015 – thanks to the re­duc­tion in net pay­ments for in­ter­est, div­i­dends and prof­its, as well as for salaries.

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