Record deficit increase

There was a visible increase in the current account deficit in November. The trade balance created a 3.27bn-euro deficit at the end of November 2004, 31.5% higher than at the same time the previous year. Compared with the previous month, the trade balance increased 638 million euros, or more than 24%. As a result, the pace of growth was higher than 22% in October and the highest rate seen since the start of 2004. The current account deficit has already exceeded 6% of GDP and, with full-year figures included, could reach 6.3%, significantly more than the initially expected 5.4%. Given the increase in consumption around the holiday period and the related lending boom at the end of last year, the fast pace of growth of the current account deficit will most likely continue in December. An optimistic explanation is that importers built up their stocks in November, meaning the deficit will slow down its growth a little in December. ZF