Restrictions on capital slash imports

The capital controls have had a profound impact on imports and the current account balance. The latter was running a surplus for the first seven months of the year against a deficit in the same period of 2014, according to data issued on Monday by the Bank of Greece.

In the year to the end of July the current account figures showed a surplus of 357.3 million euros, against a deficit of 2.6 billion euros last year.

The reversal of the situation is attributed to two reasons.

The first reason was the capital controls that saw imports slump by 1.6 billion euros or 35.5 percent compared with July 2014.

In total, the contraction of imports amounted to 3.5 billion euros in the first seven months of the year, taking their total value to 25 billion euros.

This development led to a trade deficit of 10.2 billion euros in the January-July period, against 12.9 billion euros a year earlier.

Exports fell from 15.6 billion euros last year to 14.8 billion in January-July 2015.

The second factor was the payment of 1.8 billion euros from the return of the earnings of the Eurosystem from the holding of Greek bonds.