The euro zone's current account worsened further in December to show a deficit of €13.3 billion, the European Central Bank said today.
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.
In November, the euro zone showed a deficit of €10.5 billion, according to revised data from the ECB, following a deficit of €9.6 billion in October. That underscored a lack of competitiveness by the then 16-nation bloc as a whole.
The euro zone has posted almost a year's worth of deficits, interrupted only by a surplus of €1.6 billion in January 2010. For all of 2010, the euro zone showed a current account deficit of 56.4 billion compared with a shortfall of €51.4 billion in 2009.
Within the euro zone, countries like Germany continue to post surpluses owing to strong exports, while others have structural external deficits.
A breakdown of the data showed that the seasonally-adjusted exports of goods fell to €134.5 billion in December from €136.3 billion in November, while imports declined more sharply to €134.1 billion from €140.4 billion.
On the financial account, the ECB reported an unadjusted net inflow of €57 billion in December as more money was invested in euro zone assets than was placed abroad by euro zone companies and institutions.
On a 12-month cumulative basis, the euro zone's seasonally adjusted current account - which includes capital transfers - showed a provisional deficit of €56.4 billion, or around 0.6% of the now 17-nation bloc's gross domestic product (GDP).
