Friday, March 28, 2014
A nasty looking current account
Posted by David Smith at 11:30 AM
Category: Thoughts and responses

Today's GDP figures - the third take on the final quarter of 2013 - showed a rise of 0.7%, as before, and confirm that business investment contributed significantly to that growth. Overall wages and salaries rose by 3% in 2013 compared with 2012. More here.

The bad news today with in the balance of payments. The first estimates for the third quarter currnet account deficit were awful, a deficit of just over 20 billion. Today's showed that deficit revised up, to 22.8 billion, and only a small fall to 22.4 billion, 5.4% of GDP, in the fourth quarter.

These are big numbers, though they are not mainly driven by the trade deficit, which narrowed to 5.7 billion in Q4 from 10 billion in Q3. The 2013 deficit narrowed from 33.4 billion to 26.6 billion. The damage is being down by a collapse in investment income, traditionally in surplus. It was in deficit by 17.4 billion in 2013, mainly in the final two quarters of the year. More here.