The EU has racked up a current account deficit to the tune of US$55 billion so far this year

The European Central Bank (ECB) announced a €9 (US$10) billion surplus in the eurozone’s current account for May, a significant rise compared to April’s €4 billion.

The upturn contrasts starkly with a deficit of €14 billion in the previous year, mainly due to increasing energy import costs.

May’s data revealed a €23 billion surplus in goods, contrasting with a deficit of €10 billion the previous year, while a €6 billion services surplus was reported, albeit lower than last year’s €13 billion.

However, primary income saw a deficit of €8 billion, and secondary income had a €12 billion deficit.

The current account balance represents the total of foreign transactions for goods, services, income, and transfers.

The cumulative annual current account balance for the past twelve months until May reported a €49 (US$55) billion deficit, equivalent to 0.4% of GDP.

This is in contrast to the €161 billion surplus a year ago, which was 1.3% of GDP.

In the financial account, euro area residents made net investments of €23 billion in foreign portfolio investment securities during the year ending May 2023.

Conversely, non-residents invested €281 billion in euro area portfolio investment securities during the same period.

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