Greece current account positive for fifth consecutive month

Greece registered current account surplus for fifth consecutive month in September. For September, current account surplus was €0.838 billion, up by €0.228 billion from a year ago. Deficit in balance of goods declined by €663 million, however due to decrease in freight activity surplus in services declined by €502 million.

Despite the positive trade balance, recovery remain in doubt due to the following reasons -

• Surplus has been declining since July, when it recorded €4.25 billion. Even in August, surplus was €2.091 billion. If the downtrend persists, Greece will soon be back in current account deficit.

• Moreover, this surplus came in the back of decrease in imports, rather than rise in exports. In September, imports dropped by 25% partially due to demand lack and rest due to imposition of capital controls.

• Exports also dropped by -19.9%.

This year, Greece current account is still positive so far, with a surplus of €1.8 billion, while last year it was deficit of €53 million.

True recovery will be considered only then, when Greece reports surplus with increase in exports and without any capital controls.

Greece 10 year yield is trading with a premium of 7.04% against equivalent German counterpart.