Balance of Payments of Greece and Balance of Payments of Greece

Balance of Payments of Greece

1. Topic : BOP OF GREECE SUBJECT : INTERNATIONAL FINANCIAL MANAGEMENT P.C. SAI PRASANNA 22031E0029

2. S.NO BALANCE OF PAYMENT 2018 2019 2020 2021 2022 1 CURRENT ACCOUNT -5,232.2 -2,725.5 -10,964.4 -12,271.6 -21,225.6 2 CAPITAL ACCOUNT 353.2 679.8 2,733.6 4,000.9 3,111.6 3 CURRENT & CAPITAL ACCOUNT -4,879.1 -2,045.6 -8,230.9 -8,270.7 -18,113.9 4 FINANCIAL ACCOUNT -3,923.7 -2,247.0 -7,747.7 -7,107.6 -16,152.0 5 BALANCING ITEM 955.4 -201.3 483.2 1,163.1 1,962.0 BOP OF GREECE

3. Interpretation of the Balance of Payments table: The table shows the Balance of Payments (BOP) for a country from 2018 to 2022, with five main categories: Current Account:   This reflects the country's net trade in goods and services. A negative value indicates a  current account deficit , meaning the country imports more than it exports. Capital Account:   This records net foreign investment in the country (acquisitions of assets by foreigners minus acquisitions of foreign assets by residents). A positive value indicates a  capital account surplus , meaning more foreign investment is flowing into the country than out. Current & Capital Account:   This adds the current and capital accounts, providing a broader picture of the country's net foreign transactions with the rest of the world . (CONTINUES…..)

4. A negative value indicates a  current and capital account deficit , meaning the country is a net borrower from the rest of the world. 4 . Financial Account:   This captures foreign investment transactions that are not reflected in the capital account, such as portfolio investments (buying and selling stocks and bonds). A negative value indicates a  financial account deficit , meaning more financial assets are flowing out of the country than in. 5. Balancing Item:   This is a statistical discrepancy to ensure the total debits (money flowing out) equal the total credits (money flowing in) in the BoP . It should ideally be close to zero.

5. POSSIBLE EXPLANATIONS FOR THE TRENDS: The reasons behind the increasing current account deficit could be factors like strong domestic demand for imported goods, a decline in exports, or a combination of both. The capital account surplus could be due to factors like attractive investment opportunities in the country or investors seeking diversification in their portfolios. The financial account deficit could be driven by factors like higher interest rates abroad, political or economic uncertainty in the country, or a search for higher returns by domestic investors .

6. Overall, the BOP data suggests a situation where the country is increasingly reliant on foreign capital to finance its current account deficit. This raises concerns about the country's external vulnerability and the potential impact of changes in global financial conditions. CONCLUSION

7. REFERENCES https://www.bankofgreece.gr/en/statistics/external-sector/balance-of-payments