Eurozone current account deficit sharply lower in January

18th March 2011, Comments 0 comments

The eurozone's current account improved sharply in January to show a deficit of 0.7 billion euros ($980 million), the European Central bank said Friday.

In December, the eurozone showed a deficit of 12.5 billion euros, according to revised data from the ECB, following a deficit of 10.5 billion euros in November, reflecting a lack of competitiveness by the then 16-nation bloc as a whole.

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.

The eurozone has now posted a full year's worth of deficits, following the last surplus, of 1.6 billion euros, in January 2010.

Within the eurozone, export powers such as Germany continue to post surpluses while others have structural external deficits.

A breakdown of the data showed that the seasonally-adjusted exports of goods rose to 146.6 billion euros in January from 135.1 billion euros in Decembber, while imports increased to 145.1 billion euros from 134.9 billion euros.

On the financial account, the ECB reported an unadjusted net outflow of seven billion euros in January 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 -- which includes capital transfers -- showed a provisional deficit of 58.1 billion euros, or around 0.6 percent of the now 17-nation bloc's gross domestic product (GDP).

© 2011 AFP

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