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Friday, February 19, 2016

Greece's Current Account: 2015 vs. 2014, And Both Against 2009

According to figures just published by the Bank of Greece, Greece, for the first time in living memory, accomplished a break-even in its current account balance. Below is a comparison of the 2015 figures with the figures of the previous year. Additionally, both years should be compared with the figures for the year 2009, which are in the far-right column.

(in BEUR)

January-December
2015 2014 2009
Revenue from abroad
Exports 24,8 26,8 17,8
Services (e. g. tourism) 28,0 31,1 27,1
Other income 5,9 6,9 6,9
Current transfers 1,9 2,6 2,7
------ ------ ------
Total revenue from abroad 60,6 67,4 54,5
Expenses abroad
Imports 42,0 49,1 50,9
Services (e. g. tourism) 11,0 12,8 15,6
Other expense (e. g. interest) 5,2 6,3 13,7
Current transfers 2,4 2,9 3,7
------ ------ ------
Total expenses abroad 60,6 71,1 83,9
Net foreign deficit (current account) 0,0 -3,7 -29,4
Trade balance -17,2 -22,3 -33,1
Services balance 17,0 18,3 11,5
Other balance 0,7 0,6 -6,8
Current transfer balance -0,5 -0,3 -1,0
---- ---- ----
Net foreign deficit (current account) 0,0 -3,7 -29,4


2015 vs. 2014: a very unusual development in as much as BOTH, revenues AND expenses, declined substantially. In fact, every single category, both on the revenue as well as on the expense side, declined! Since expenses declined much more than did revenues, the current account balance improved from a negative 3,7 BEUR in 2014 to the break-even in 2015. A most significant performance in terms of sheer numbers. As regards content, the situation looks a bit like a race to the bottom.

2015 vs. 2009: this comparison reveals the staggering transformation which Greece's current account has experienced since the beginning of the crisis. While revenues increased 6,1 BEUR, expenses declined 23,3 BEUR (!). The combined effect was the elimination of the current account deficit which had stood at 29,4 BEUR in 2009. Obviously, the 2009 deficit was not sustainable. To what extent the race to the bottom will do the Greek economy any good remains to be seen.

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