Trade deficit remains flat in first 4 months

Greece’s trade deficit in the first four months of the year remained flat at last year’s level as the continued strong demand for foreign products neutralized a moderate increase in exports. A sharp fall in the inflow of EU transfers and a wider income account deficit, however, jacked up the current account deficit by 16.36 percent to 4.33 billion euros in the January-April period, statistics from the Bank of Greece (BoG) showed yesterday. The difference between the amount of goods sold abroad and the amount of goods imported amounted to 7.54 billion euros. The non-oil trade deficit narrowed by 8.23 percent to 5.86 billion euros on the back of an 8.26 percent jump in exports to 3.63 billion euros. Greek manufacturers in a recent ICAP survey said they expect exports to pick up sharply this year and sales to double. Imports continued to surge ahead, up 2.6 percent to 11.17 billion euros, with demand fueled by Greece’s above-average economic expansion and projects related to the 2004 Olympic Games, according to BoG data. The economy grew 4.3 percent in the first quarter, the highest in the EU. The government is targeting GDP growth of 3.8 percent this year even as the European Central Bank predicted under 1 percent growth for the eurozone. The services surplus rose to 1.6 billion euros from 1.34 billion euros as a 4.2 percent drop in net receipts from travel services was more than offset by a 6 percent increase in net receipts from transport services. The income account deficit widened by 146 million euros, mainly due to higher net payments for interest, dividends and profits as well as lower net receipts from fees and wages. A sharp drop in the inflow of EU transfers reduced the transfers surplus by 712 million euros to 2.45 million euros. The trade deficit in April fell 6.71 percent as exports jumped 12.54 percent to 957.5 million euros and imports dipped slightly to 2.8 billion euros. The current account deficit in the same month remained unchanged at 1.06 billion euros, helped by the lower non-oil trade and income account deficits and a bigger services surplus. Greece’s inability to attract foreign investments was once again underscored by the BoG figures, which showed a 52 percent increase in the net outflow of funds.

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