Euro zone current account deficit €5.8 billion

The euro zone current account deficit was €5.8 billion in April compared with a deficit of €6

The euro zone current account deficit was €5.8 billion in April compared with a deficit of €6.7 billion the same period the year earlier, the European Central Bank said.

The ECB said the decrease in the deficit resulted largely from an increase in the goods surplus to €8.2 billion from €3.1 billion in April last year, which offset increases in the income and services deficits.

It said seasonally adjusted data shows exports and imports of goods (in values) declined in April compared with the previous month - reversing the upward movement seen in February and March.

In the financial account, combined direct and portfolio investment in the euro area showed net inflows amounting to €19.3 billion in April.

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Direct investment in the euro area experienced net inflows of €7.7 billion, whereas portfolio investment registered net inflows of €11.5 billion, the ECB said.

Meanwhile euro zone M3 money supply accelerated in May, confounding expectations the European Central Bank's key monetary gauge would resume its downward trend.

The annual money growth rate reported by the ECB today accelerated to 7.8 per cent in May from a revised 7.4 per cent in April, moving further away from the ECB's 4.5 per cent benchmark.

The ECB, which in the past has played down the strong growth blaming it on investor flight away from volatile stocks into safe short-term assets, made no similar comment this time.

Analysts said the stronger than expected reading would add to ECB worries, though not by so much that it would hike rates as early as its next policy meeting on Thursday of next week.

AFP