ECONOMY

Shipping maintains position as chief currency earner

Shipping outpaced all Greek exports of goods and commodities, as well as tourism, as a currency earner in the January-October 2004 period, bringing in 10.9 billion euros, against 10.2 billion and 9.8 billion respectively, Bank of Greece data released yesterday show. The country’s current account deficit narrowed by 2,088 million, or 36 percent, over the corresponding period in 2003, and came down to 3,716 million. This development mainly reflects a substantial rise in the services surplus, an increase in the transfers surplus, as well as a small decrease in the income account deficit, which more than offset a strong rise in the trade deficit. The trade deficit grew by 2,139 million euros, or 11.3 percent, year-on-year, to 20,700 million euros. Imports rose by 435 million due to higher oil prices. By contrast, developments in the services account were very favorable, mainly due to shipping receipts, with the surplus growing by 3,472 million euros, or 32.3 percent. Net transport receipts grew 2,404 million euros and net travel receipts by 704 million. Receipts from tourism in the 10 months totaled 9,870 million euros, against 9,020 million in the same period of 2003. Transfers from the European Union totaled 5,320 million euros, against 4,250 million in January-October 2003. The deficit in the «other» services account virtually came to zero. Non-residents’ direct investment in Greece reached 1,044 million euros, while residents’ direct investment abroad came to 431 million. The most important direct investments in Greece by non-residents over the first 10 months of 2004 included the acquisition of Panafon mobile phone operator Vodafone, which had taken place partly in 2003 and was completed in January and February of the current year; the acquisition of Geniki Bank by Societe Generale in March; the acquisition of Delta Singular Outsourcing Services by the US company First Data in July; the increase in the participation of Paneuropean Oil and Industrial Holdings in the share capital of Hellenic Petroleum in August, and the acquisition of electrical goods retailer Kotsovolos by the UK’s Dixons in September. Over the same period, a substantial net inflow of 11,690 million euros was recorded under portfolio investment. Finally, a net outflow of 8,721 million euros was recorded under ”other” investment, largely associated with the sizable outflow of domestic credit institutions’ funds to deposits and repos abroad. In October alone, the current account deficit was smaller by 39 million euros, compared with the corresponding month of 2003. This improvement is mainly accounted for by an increase in the services surplus and – to a lesser extent – by a decline in the income account deficit. No remarkable flows were recorded under direct investment. At the end of October, Greece’s reserve assets came to 3.0 billion euros.