ECONOMY

C/A deficit rises to a record high

Greece’s current account balance soared to a record deficit of 14.047 billion euros, or 7.8 percent of the country’s gross domestic product (GDP) in 2005, 40 percent higher than in the previous year, according to provisional data released yesterday by the Bank of Greece. The data shows that the current account deficit grew by 3.594 billion euros, «reflecting mainly a rise in the trade deficit and the income account deficit and, secondarily, a drop in the current transfers surplus. The small increase in the services surplus only partly offset the above developments,» the Bank of Greece said. The increase in the trade deficit by 2.11 billion euros (to 27.55 billion euros) is due to the higher costs of importing oil and increased expenditures by shipowners in building new ships. Excluding these two items, the trade deficit narrowly declined, to 20.20 billion euros, from 21.06 billion in 2004. The services surplus increased by 231 million euros, to 15.70 billion, as a result of the increase in receipts from tourism and transport. Specifically, spending on tourist activities by non-residents increased 6.7 percent, to 11.04 billion euros. Spending by Greek tourists abroad increased 5.9 percent, to 2.45 billion euros. Net receipts by transport services were almost steady at 13.87 billion euros. The increase in the income account deficit by 1.26 billion euros to 5.38 billion is mostly due to the greater number of Treasury bonds bought by non-residents.