Greek current account surplus narrows in July, decline in service sector surplus drags

Data released by Bank of Greece on Tuesday showed that Greece current account surplus narrowed y/y in July. Increased trade deficit as a result of higher imports and a lower services surplus was seen as the main reason. Bank of Greece data showed the current account surplus reached 1.433 billion euros ($1.60 billion) from 2.507 billion euros in July 2015.

Tourism revenues fell slightly to 2.85 billion euros from 2.95 billion in the same month a year earlier. Exports declined 2.9 percent on the month, although the main impact was from falling prices with a notable focus on energy prices as volumes increased 6.2 percent on an annual basis.

There was a decline in the services-sector surplus to EUR3.0bn from EUR3.2bn with an annual decline in non-resident arrivals of 2 percent over the year only partially offset by higher receipts for transport services. Given the importance of UK visitors and Sterling weakness, declining levels of spending by incoming visitors is likely to remain a concern over the next few months.

 "The deficit of the balance of goods doubled mainly on account of a significant rise in imports, compared with July 2015, which had registered a sharp drop year-on-year due to the imposition of capital controls," the Bank of Greece said.