According to latest BoG data, C/A balance showed a surplus in September – for third month in a row – at €775m from deficit of €1,069m last year, reflecting a decrease in trade deficit by €700m or 34.1% to €1,351m, a drop in the surplus of the services balance by €75m or 3.5% to €2,048m, a surplus of the income account deficit of €144m from deficit of €939m last year and a decline in current transfers deficit by €136m or 67.3% to €66m.

Furthermore, C/A deficit narrowed by €11.3bn or 76.5% y-o-y to €3.5bn in 9M’12. The substantial decline primarily reflects a significant decline of €5.3bn or 25.4% in the trade deficit to €15.7bn, a €4.4bn or 68.6% decrease in the income account deficit to €2.0bn as well as increases of €0.9bn (+143%) and €0.6bn (+4.9%) in the surpluses of the services balance and the current transfers balance to €1.6bn and €12.6bn respectively.

BoG noted that the big drop in income account deficit by €4.4bn is mainly due to the sharp decline in net interest payments on GGBs held by non-residents following the PSI as well as deferred interest payments on loans under the support mechanism, owing to an interest rate adjustment.

It is also noteworthy that gross transport receipts (mainly from merchant shipping) and the corresponding payments fell by 3.4% and 14.5% y-o-y respectively, while travel spending in Greece by non-residents eased by €0.25bn or 2.7% y-o-y to €9.1bn in 9M’12, also attributed to a drop in non-residents’ arrivals by 5.2% y-o-y over the same period.