Eurozone posts 7.5 billion euro trade deficit: ECB

19th October 2010, Comments 0 comments

The eurozone's balance of payments worsened sharply to a deficit of 7.5 billion euros (10.4 billion dollars) in August, the European Central Bank said Tuesday as growth in the 16-nation bloc weakened.

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 area's ability to pay its way in the world.

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

In July, the eurozone measure showed a deficit of 4.1 billion euros, according to revised data from the ECB, underscoring a lack of competitiveness by the 16-nation bloc as a whole.

The eurozone has posted almost a year's worth of deficits, interrupted only by a small surplus of 900 million euros in December.

The figures are often amended meanwhile, and the July figure was initially reported as a deficit of 3.8 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 declined to 130.1 billion euros in August from 133.3 billion in July, while imports slipped to 129.2 billion euros from 130.4 billion.

On the financial account, the ECB reported unadjusted net outflows of just one billion euros in July as slightly less money was invested into 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 48.6 billion euros, or around 0.5 percent of the eurozone's gross domestic product (GDP).

© 2010 AFP

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