EU current account deficit shrinks in fourth quarter of 2006

The European Union's external current account recorded a much smaller deficit in the fourth quarter of 2006, the EU's statistics bureau Eurostat said on Thursday.

Deficit for the previous 25-nation EU stood at 4.8 billion euros in the last quarter of 2006, sharply down from 20.5 billion euros in the previous quarter and 24.0 billion euros in the same period of 2005.

In the fourth quarter of 2006, compared with the fourth quarter of 2005, a lower deficit was recorded in the goods account, down from 32.1 billion euros to 25.2 billion euros, while the surplus of the services account increased from 16.0 billion euros to 19.3 billion euros.

The surplus of the income account nearly tripled to 16.5 billion euros, but the deficit of the current transfers account expanded from 13.6 billion euros to 15.4 billion euros.

The surplus recorded in the services account mainly resulted from surpluses in financial services, other business services, transportation and computer and information services, which were partially offset by deficits in travel as well as royalties and license fees, the Eurostat said.

According to Eurostat, in the fourth quarter of 2006, the EU external current account recorded the biggest surplus with the United States, standing at 25.7 billion euros, and the largest deficit with China, which was 35.2 billion euros.

The Eurostat also released preliminary annual results for last year. The EU external current account deficit increased from 53.6 billion euros in 2005 to 69.8 billion euros in 2006, mainly due to a sharp rise in the goods deficit, surging from 92.7 billion euros to 145.7 billion euros.

Current transfers account also deteriorated, with deficit expanding from 48.7 billion euros to 54.3 billion euros. The deficits were partially offset by higher surpluses in the services account, up from 55.1 billion euros to 67.1 billion euros, and in the income account, which was 63.0 billion euros compared with 32. 8 billion euros in 2005.

Source: Xinhua