EU current account deficit narrows in Q4 of 2007

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The European Union current account deficit narrowed in the fourth quarter of last year, official figures from EU statistics bureau Eurostat showed Tuesday.

In the last three months of 2007, the EU’s current account recorded a deficit of €2.8 billion ($4.5 billion), compared with a deficit of €13.4 billion in the Q4 of 2006 and a deficit of €21.2 billion in the Q3 of 2007.

Compared with the same period in 2006, a higher deficit was recorded in the goods account in the Q4 of 2007, rising from €31.0 billion to €40.7 billion, while the surplus of the services account increased from €17.7 billion to €21.4 billion. The surplus of the income account nearly doubled to €32.8 billion, mainly due to Britain’s income account, which recorded a significant surplus after being in deficit for several quarters. The deficit of the current transfers account remained stable.

Eurostat said the surplus recorded in the services account was mainly the result of surpluses in “business services” including financial services, transportation and computer and information services, partially offset by deficits in travel and royalties and license fees. In the Q4 of 2007, the EU recorded the largest current account surplus with the United States, which was €33.6 billion, and the biggest deficit with China, which stood at €38.6 billion, according to Eurostat.

Preliminary annual results for 2007, compared with 2006, also showed a decrease in the EU current account deficit, down from €82.9 billion to €72.4 billion, mainly due to a fall in the goods account deficit and a higher surplus in the services account. (people.com.cn)

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