BoG: Current Account Deficit Widens in Q1 2025

The current account deficit increased by €707.8 million in the first quarter of 2025 compared to the same period in 2024, reaching €4.5 billion, according to data from the Bank of Greece. The report indicates that the worsening of the current account deficit is primarily due to balances in services, secondary incomes, and goods, partially offset by improvements in primary income balances. Specifically, for March 2025, the current account deficit rose by €496.7 million year-on-year to €3.0 billion. The trade balance deteriorated as exports declined while imports increased. In current prices, exports fell by 8.9% (-3.8% in constant prices), while imports rose by 2.6% (3.3% in constant prices). Excluding fuels, both exports and imports showed increases. The surplus in the services balance decreased mainly due to reductions in transportation and tourism balances, despite a rise in tourist arrivals and related revenues. The primary income balance improved significantly, nearly halving its deficit compared to March 2024, driven by increased net receipts from other incomes and reduced payments for interest, dividends, and profits. Conversely, the secondary income balance worsened due to higher net payments from other sectors. For the entire Q1 2025, the trade deficit widened as export declines outpaced minor import decreases. Exports excluding fuels strengthened, while corresponding imports grew slightly. The services surplus shrank across all sub-balances, particularly in transport and other services. Notable changes were also observed in the primary income balance, which turned into a surplus from a deficit last year, while the secondary income balance saw a reduction in its surplus due to increased payments from the government and reduced receipts from other sectors. The capital account balance recorded a surplus of €122.1 million in March 2025 against a deficit in March 2024, driven by net receipts from the public sector. Overall, the total current account and capital account deficit increased to €2.9 billion in March but decreased to €4.0 billion for the quarter compared to the same period in 2024. Financial account balances reflected mixed inflows and outflows in direct investments, portfolio investments, and other investments.