Fuel costs send trade deficit up sharply in first five months

Greece’s spending on fuel rose sharply in the first five months of the year, according to Bank of Greece (BoG) data released yesterday. The country paid 4.87 billion euros in the January-May period, against 3 billion in the same period of last year, an increase of 60.64 percent. Recently, Deputy Finance Minister Petros Doukas projected that Greece will pay about 10 billion euros this year, against 7.5 billion in 2005. The central bank data also show that in the same period of 2006, the trade balance deficit rose 70.43 percent to 12.19 billion euros, from 7.15 billion euros in the same period last year. According to BoG, this deterioration is mainly due to a higher trade deficit, and secondarily due to an increase in the deficit of the incomes balance and a fall in the surplus of the services balance. The surplus of the current transfers balance remained about the same, year-on-year. The growth of the total trade deficit (including fuels and ships) by 3.53 billion euros is mainly due to an increase in the rise of net payments for fuel imports (by 1.26 billion). Net payments for ships were up by 1.23 billion euros and the deficit for all other imports, apart from fuel and ships, increased 1.14 percent. Exports were up 17.84 percent and imports 15 percent. The 692-million-euro rise in export receipts, excluding fuels and ships, was offset by an increase of 1.86 billion euros in import payments. In the January-May 2006 period, direct investment inflows rose to 893 million euros from 59 million a year earlier. The improvement was the result of a net inflow of 1.17 million euros from non-residents and a net outflow of 281 million for direct investment abroad by residents.