ECONOMY

Tourism tips current account balance

The country’s current account balance continued its impressive course in August, leading to an unprecedented surplus, which is attributed to the increase in tourism and in exports.

Bank of Greece data released on Friday showed that in the first eight months of the year, the current account balance recorded a surplus of 1.6 billion euros, or roughly 0.8 percent of the country’s gross domestic product.

The figures pointed to a 1-billion-euro increase in tourism revenues in the period from January to August compared with the same eight months last year, with the rise in tourism traffic bringing takings up to 8.6 billion euros. In August alone there was a 313-million-euro increase.

This constitutes a major change from last year, as in in the period from January to August 2012 the balance was negative by 3.7 billion euros, while in the first eight months of 2011 the current account deficit had amounted to 13.7 billion euros.

Besides tourism, there are three other factors that have contributed to the change in balance, which is contributing to the reduction of the GDP contraction rate this year.

The first reason is the increase in transfers from the European Union, which have grown from 3.5 billion euros in the first eight months of last year to 5.2 billion in the year to end-August. This has been the biggest shift within one year and was the biggest factor along with tourism for tipping the balance.

Another factor is the 6.2 percent rise in exports on annual basis, amounting to an additional 900 million euros.

Exports in the January-August period reached up to 15 billion euros, from 14.1 billion euros a year earlier. Their rise is attributed to the rise in fuel exports, and not so much to the increase in exports of other goods.

Finally, imports have also played a part, as their decline on the drop in domestic consumption amounted to 7 percent year-on-year, or 2 billion euros.

Imports too have witnessed a major decline in fuel transactions, given the sharp drop in the consumption of both heating oil and fuel for vehicles.