Drop in travel proceeds hurt current account balance in Jan-May

Incoming tourism plunged by 65.5% in the January-May period this year while travel proceeds dropped 51.2% in the same period, compared with the corresponding periods in 2020, the Bank of Greece said on Wednesday.

The central bank, in a report, said that this development contributed in the worsening of the country’s current account balance.

More specifically, in May 20201, the current account deficit grew year-on-year, mainly due to a worsening in the balance of goods and, to a lesser extent, the services balance, which was partly offset by an improvement in the primary and secondary income accounts.

In the January-May period, the current account deficit grew year-on-year, due to a deterioration in the balances of goods and services and the secondary income account, which was partly offset by an increase in the surplus of the primary income account.

In May, the current account showed a deficit of 1.4 billion euros, up by 477 million year-on-year. The increase in the deficit of the balance of goods is accounted for by a larger rise in imports, in absolute terms, than in exports. However, exports increased by 59,6% and 25,9% at current and constant prices, respectively, while imports rose by 56,2% and 27,3% at current and constant prices, respectively. In particular, non-oil exports of goods grew by 29.5% and 23.2% at current and constant prices and non-oil imports by 40.4% and 37.3% at current and constant prices, respectively.

The surplus in the services balance registered a small decline, which was due to a deterioration in the transport balance.

By contrast, the travel balance and the other services balance improved year-on-year. Non-residents’ arrivals and the relevant receipts rose by 413.7% and 286.2%, respectively, as a result of base effects following their low levels in 2020. The surplus of the transport balance decreased by 30%.

[ANA-MPA]