External deficit falls in Q1

The external trade deficit of Greece, excluding petroleum products, registered a further deterioration in the first quarter of the year, but a significant increase in capital transfers from the European Union and lower net fuel imports helped the overall current account balance show an improvement, data released by the Bank of Greece yesterday shows. The current account deficit fell by 467 million euros relative to the first quarter of last year, closing at 2,030 million euros. The trade deficit, excluding petroleum products, increased by 131 million euros, as losses in export receipts outweighed a small decline in payments for imports. By contrast, net fuel imports cost 166 million euros less. In the same period, an increase in net receipts from tourism and related services did not match a fall in net income from transport services, sending the overall surplus from services marginally lower. The surplus of the transfers balance rose, due to an increase in net inflows from the EU by 558 million euros. The direct investment balance in the first quarter registered a net outflow of 218 million euros, in contrast to a net inflow of 2,409 million euros for portfolio investment, mainly due to strong demand for Greek bonds in February. There was also a net inflow of 1,805 million euros for other investments, the result of a steep increase in bank deposits by non-residents that outweighed an also significant reverse flow. In March alone, the current account balance showed a deficit of 603 million euros, which was about half the amount of the same month last year, due to the lower overall trade deficit and a significantly higher surplus in the transfers balance. The country’s foreign exchange reserves stood at 8.5 billion euros at the end of March. CosmOTE bought one of three UMTS licenses but was outbid for the GSM spectrum that would have enhanced its roaming revenues.