Greece’s current account deficit showed a substantial improvement in 2004, as a considerable widening of the trade deficit was mostly offset by a large increase in the services surplus (notably from shipping), a rise in the transfers surplus, and a small decrease in the income account deficit, according to data published by the Bank of Greece yesterday. The current account deficit narrowed by 2.235 billion euros relative to 2003 and fell to 6.411 billion or 3.9 percent of GDP (compared with 5.6 percent of GDP in 2003). The total trade deficit grew by 2.792 billion euros in comparison with 2003. Specifically, the 3.629 billion (or 12.8 percent) rise in the non-oil import bill more than offset a 1.276 billion (or 13.0 percent) rise in non-oil export receipts, while the net oil import bill increased by 439 million. This contrasts with the very favorable developments in the services sector, where the surplus widened by 3.961 billion euros or 34.4 percent, mainly as a result of a very large increase in net transport (mainly shipping) receipts, by 2.933 billion, or 63.1 percent. A 678-million-euro (or 9.2 percent) rise in net travel receipts also made a positive contribution. Moreover, the «other» services deficit narrowed sharply (to 149 million euros, from 499 million in 2003). Furthermore, the transfers surplus grew by 927 million euros in 2004, to reach 6.015 billion. This is almost wholly accounted for by a substantial increase in general government receipts (mainly transfers from the EU) by 1.169 billion euros or 21.7 percent, while general government payments (mainly to the EU) rose by 117 million and the net receipts of the «other» sectors (mainly emigrants’ remittances) declined by 125 million. Finally, there was a small improvement in the income account deficit, which decreased by 140 million or 5.4 percent in 2004, as net interest, dividends and profit payments fell. In the financial account balance, there was a considerable increase both in Greek direct investment abroad and in foreign direct investment in Greece. A net inflow of 13.728 billion euros was recorded under portfolio investment, as foreign investment in Greek bonds was more than double the reverse flow. Greek banks increased their placements in foreign deposits and repos by 6.3 billion euros. At the end of 2004, Greece’s reserve assets came to 2.0 billion euros, compared with 4.6 billion at end-2003.