Current account deficit growing
The current account deficit soared to 13 percent of gross domestic product (GDP) in the first 11 months of 2008, highlighting Greece’s serious lack of competitiveness. This rate is the highest in the eurozone and one of the reasons why the cost of borrowing in Greece continues to rise. According to Bank of Greece data, the current account deficit in the period January-November 2008 reached 12.95 percent of GDP, up from 12 percent in the same period of 2007 and 11.5 percent in the first 10 months of last year. In the 11 months to November 2008 the deficit totaled 31.8 billion euros, up from 27.4 billion euros a year earlier, which represents a 16 percent increase. The main reason for this development was soaring fuel prices. Spending on fuel imports rose by 43.8 percent in the first 11 months of 2008 compared to the previous year, taking the oil balance deficit from 8 billion euros to 11.5 billion. However, the current account deficit continues to be contained by receipts from tourism and shipping, although no one knows whether these sectors will keep growing in 2009.
