Eurozone balance of payments deficit stable in July: ECB

17th September 2010, Comments 0 comments

The eurozone's balance of payments remained in deficit in July, but at the same level as in June at 3.8 billion euros (5.0 billion dollars), the European Central Bank said Friday.

The balance of payments, which includes payments for imports and exports of trade in goods and services, is a closely tracked indicator of a country's or region's ability to pay its way in the world.

It is crucial for the long-term confidence of investors and trading partners.

The largest positive contributor to the current account balance was a rise in the goods surplus, from 2.5 billion euros in June to 3.4 billion euros in July.

Services made a contribution of 2.2 billion euros in July but that was less than the 2.6 billion euros recorded in June.

The eurozone measure posted a deficit of 3.8 billion euros that month, revised data from the ECB showed, reflecting a lack of competitiveness by the 16-nation bloc as a whole.

The figures are often amended however and the June figure was initially reported as a deficit of 4.6 billion euros.

The figures were an improvement on May, which had a deficit of 7.4 billion euros.

The overall number for the eurozone combines surpluses from strong exporting nations such as Germany with the balances of countries which have structural external deficits.

A breakdown of the data showed that seasonally-adjusted exports of goods edged lower to 132.6 billion euros in July from 134.1 billion euros in June, while imports slipped to 129.2 billion euros from 131.6 billion euros.

On the financial account, the ECB reported net outflows of 26 billion euros in July as less money was invested in eurozone assets than was placed abroad by eurozone companies and institutions.

On a 12-month cumulative basis, the eurozone's seasonally adjusted current account showed a provisional deficit of 49.8 billion euros, or around 0.6 percent of the eurozone's gross domestic product (GDP).

© 2010 AFP

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