ECONOMY

Oil prices up trade deficit

Greece’s trade deficit widened by 6.9 percent to 1.85 billion euros in March following the sharp jump in global oil prices in the runup to the war in Iraq, provisional data from the Bank of Greece yesterday showed. The trade deficit in the first quarter of the year increased by the slower pace of 2.5 percent to 5.7 billion euros. The widened trade deficit pushed the current account deficit to 990 million euros in March, an increase of 35 percent. The C/A deficit in the January-March period rose 23.7 percent to 3.27 billion euros. Global oil prices soared close to $40 levels in the period before the military action in Iraq in March. For Greece, the consequence was damaging as «net payments for oil imports were more than double those in March 2002,» the central bank said. Oil imports rose to 569 million euros from 266 million a year earlier, pushing the oil deficit from 200 million to 456 million euros. Imports continued to remain robust, growing 10.53 percent in March, due in part to robust consumer spending, which boosted GDP 4.3 percent in the first quarter. The jump in the oil price lifted exports 18.57 percent to 930 million euros, with sales of oil abroad doubling to 113 million euros and non-oil exports rising 13.65 percent to 817 million euros. The war in Iraq also took its toll on the tourist industry, the data showed, with receipts declining 5.45 percent to 168 million euros in March. Greece is hoping to make up for lost ground in the second half of the year to offset a fall in tourist bookings in the first four months of the year. EU transfers fell to 676 million euros in March from 814 million a year earlier. The government last week said it would not seek 372 million euros in reimbursement from Brussels because of irregularities related to some projects. Greece’s poor record in attracting and keeping foreign direct investments was underscored by the statistics which showed investors pulling out 65 million euros from Greece against 6.3 million a year earlier.