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EU's current account deficit drops annually in Q1

The European Union's current account deficit decreased slightly in the Q1 of this year, compared to the same period of 2006, the EU's statistics bureau Eurostat said on Wednesday.

In the first three months of 2007, the 27-nation bloc recorded a deficit of €32.0 billion in external current account, down from €36.2 billion of deficit in the Q1 of last year. However, the figure rose sharply from the previous quarter. In the fourth quarter of 2006, the EU's current account deficit stood at €18.1 billion.

Compared with a year ago, the EU registered a slightly lower deficit in the goods account in the Q1, down from €50.6 billion to €49.5 billion, while the surplus of the services account increased from €11.2 billion to €15.2 billion. The surplus of the income account rose to €17.6 billion from €16.7 billion year-on-year as did the deficit of the current transfers account, expanding from €13.5 billion to €15.3 billion.

Financial services contributed more than half of the surplus recorded in the services account, which was €8.1 billion, followed by other business services with a surplus of €6 billion. In the Q1 of 2007, the EU external current account recorded the largest surplus with the United States, standing at €22.3 billion. (