ECONOMY

Current account deficit shrinks

Greece’s current account deficit shrank 16 percent year-on-year in June to 1.94 billion euros, helped by a lower trade gap and a rise in the services balance, the country’s central bank said yesterday. In the year to June, the Bank of Greece said the current account deficit widened by 0.2 percent from the previous 12 months to 14.52 billion euros year-on-year, or about 6 percent of gross domestic product (GDP). A key macroeconomic imbalance reflecting eroding competitiveness, Greece’s current account gap had narrowed to 11 percent of GDP last year from 14.5 percent in 2008 as a recession kicked in, helping to reduce imports. «June was a month of labor unrest, including at ports, which negatively affected tourism. But in July we will see an improvement, as tourist arrivals and receipts increased,» Alpha Bank economist Dimitris Maroulis told Reuters. «The shrinking of the current account gap was expected, as there was a drop in imports coupled with a small rise in exports. We will see a contraction in the current account in 2010 to about 9 percent of GDP.»

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