Current account deficit past 2bn euros

The current account deficit has exceeded two billion euros eight months through this year, up 46.4% compared with the same time last year. The deficit widened despite the over 30% increase in the foreign currency flows in form of direct transfers to 1.35bn euros. Against a GDP valued at 55bn euros, the deficit share amounts to 3.81%. The deterioration can be deemed as serious considering the current account had reached 1.75bn euros at the end of July, that is about 3.2% of GDP. According to the agreements negotiated with the International Monetary Fund (IMF), the deficit should not go above 5.5% of GDP in 2004 and above 5.25% in 2005. The decisive factor towards this will be the development of the current account deficit in the last few months of the year, when resurgence in the demand for imported consumer goods is expected. ZF