Eurozone current account deficit worsens in December: ECB

17th February 2011, Comments 0 comments

The eurozone's current account worsened further in December to show a deficit of 13.3 billion euros ($18 billion), the European Central bank said Thursday.

The current account on the balance of payments, which includes imports and exports in both goods and services plus capital transfers, is a closely tracked indicator of a country's or area's ability to pay its way in the world.

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

In November, the eurozone showed a deficit of 10.5 billion euros, according to revised data from the ECB, following a deficit of 9.6 billion euros in October.

That underscored a lack of competitiveness by the then 16-nation bloc as a whole.

The eurozone has posted almost a year's worth of deficits, interrupted only by a surplus of 1.6 billion euros in January 2010.

For all of 2010, the eurozone showed a current account deficit of 56.4 billion euros compared with a shortfall of 51.4 billion euros in 2009.

Within the eurozone, countries like Germany continue to post surpluses owing to strong exports, while others have structural external deficits.

A breakdown of the data showed that the seasonally-adjusted exports of goods fell to 134.5 billion euros in December from 136.3 billion euros in November, while imports declined more sharply to 134.1 billion euros from 140.4 billion euros.

On the financial account, the ECB reported an unadjusted net inflow of 57 billion euros in December as more 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 -- which includes capital transfers -- showed a provisional deficit of 56.4 billion euros, or around 0.6 percent of the now 17-nation bloc's gross domestic product (GDP).

© 2011 AFP

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