Receipts from travel services recorded a decrease of 84.4% in July 2020 when compared to the corresponding month of 2019, the Bank of Greece said in a report released on Monday. Following a 3-month lock down and travel restrictions due to the pandemic, Greece opened its gates to foreign tourists on July 1st,
In particular, arrivals of non-resident travelers decreased by 85.4% compared to July last year, while revenues from transport, mainly maritime, fell by 26.2%, the report said.
In July 2020, the current account showed a deficit of €875 million, against a surplus of €1.3 billion in July 2019, due to a significant deterioration in the services balance, which was only partly offset by the improved balance of goods and primary and secondary income accounts.
A year-on-year decrease in the deficit of the balance of goods by €414 million is attributable to the fact that the drop in imports (by 15.8% at current and by 5.2% at constant prices) exceeded the decline in exports (by 12.6% at current prices), which, however, grew by 4% at constant prices.
A €3.2 billion decrease in the services surplus is mainly accounted for by lower net travel receipts. Moreover, net transport receipts also declined, while the other services deficit increased. It should be noted that travel receipts dropped by 84.4% and non-residents’ arrivals fell by 85.4% year-on-year. Transport (mainly sea transport) receipts decreased by 26.2%.
The deficit of the primary income account fell mainly on account of lower net interest, dividend and profit payments. Τhe secondary income account turned from deficit to surplus, mainly as a result of the transfer to the Greek State of income earned on ANFA/SMP holdings.
In the January-July 2020 period, the current account showed a deficit of €7.9 billion, up by €5.2 billion year-on-year. This development is almost exclusively due to a decline in the services surplus, as well as the surplus of the secondary income account, which was partly offset by a significant drop in the balance of goods deficit as well as the drop in the deficit of the primary income account.
A decrease in the deficit of the balance of goods is accounted for by a larger decline in imports, in absolute terms, than in exports. Specifically, total exports of goods fell by 13.3% at current prices, but grew by 2.4% at constant prices. Total imports of goods decreased by 15.7% at current prices (-5.3% at constant prices). It should be noted that the drop in exports and imports is largely due to a decline in oil exports and imports respectively, as a result of lower international oil prices.
A significant decrease in the services surplus is chiefly attributable to a deterioration in the travel services balance, as well as the other individual components. Travel receipts dropped by 86.2% and non-residents’ arrivals by 80.1% year-on-year, while transport receipts decreased by 12.2%.
Full Bank of Greece Report: Balance of Payments July 2020
