Greece posted a shrinking current account surplus in August compared to a year ago, marking at the same time a significant deterioration in the services balance due to the impact of Covid-19 on the struggling tourism sector which saw revenue drop by 10.5 billion euros in the first eight months of the year, according to Bank of Greece (BoG) data released on Wednesday.
According to central bank data, August 2020 recorded a surplus of 80 million euros against a surplus of 1.803 billion euros in August 2019. In 2018, Greece’s current account recorded a deficit of 5.3 billion euros, up by 2.1 billion year-on-year with 2019 data showing a deficit of 2.6 billion euros.
The August deficit was partly offset by improved trade, primary and secondary income balances.
“The shrinking of the trade gap was due to a larger decline in imports compared to exports,” the central bank said.
Lower net tourism revenues
BoG analysts attribute the decline in the services surplus to lower net tourism revenues which plummeted to 1.373 billion euros from 4.104 billion in August 2019, recording losses of some 2.7 billion euros.
“The decrease in the services surplus was due to a marked deterioration of the tourism services balance.”
Indicatively, non-resident arrivals were down by 73.3 percent and corresponding receipts decreased by 66.5 percent. The transport balance also deteriorated due to lower demand for sea and air transport.
The eight month (January-August 2020) current account balance showed a deficit of 7.9 billion euros, 6.9 billion euros higher than in the same period in 2019. BoG attributed the figure to a reduction of the services surplus, which was partly offset by the 3.1-billion-euro reduction in the goods deficit and the improvement in primary and secondary income balances.