Current account balance sinks in deepening deficit

Despite an improved export performance, Greece’s current account balance showed a significant deterioration in the January-September 2005 period, according to Bank of Greece data released yesterday. Propelled by a rise in the fuels balance deficit of about 30 percent and a 25 percent rise in interest payments, the current account deficit shot up to 8.12 billion euros, against 5.81 billion in the same period last year In September, the expansion of Greek banks in the Balkans and Aramco’s sale of its stake in Motor Oil cost Greece’s investment balance about 700 million euros. The figures show a net outflow of 592 million euros of foreign direct investment (FDI), and of 121 million of Greek funds for investment abroad. The latter mostly represented Alpha Bank’s participation in the share capital of Alpha Bank Romania and Eurobank’s acquisition of Serbia’s Nationalna Stedionica Banka. The total net outflow for the nine months was 860 million euros. In portfolio investment in September there was a net inflow of 1,985 million euros, reflecting inflows of non-residents’ funds amounting to 3,769 million, mainly for the purchase of government bonds and shares. This was partly offset by an outflow of 1,783 million euros for purchases of foreign bonds and, secondarily, of foreign Treasury bills and shares. The total net inflow for the nine months was 9,288 million euros.

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