Eurozone current account turns up surplus for December

LONDON (ShareCast) - The Eurozone's current account balance for December shows a €2bn surplus, according to the latest seasonally-adjusted figures released by the European Central Bank. The market consensus had been expecting a reading of €1.5bn. The previous month's figure was revised to a €900m deficit following a preliminary estimate of a €1.8bn surplus. The non-adjusted current account balance for December was €16.3bn compared to the previous month's upwards revised figure of €1.9bn. In 2011 as a whole, the seasonally adjusted deficit for the euro area current account amounted to €30.6bn, around 0.3% of GDP, compared with a deficit of €45.7bn in 2010. The narrowing of current account deficit stemmed from the increased services component (from €45.9bn to €59.4b) and income (from €3bn to €9.2bn). The surplus for goods, on the other hand, decreased (from €8.7bn to €4.1bn), while the deficit for current transfers remained unchanged at a deficit of €103.3bn. Meanwhile, in December the combined direct and portfolio investment recorded net inflows of €3.2bn. In direct investment, net outflows of €4.4bn in equity capital and reinvested earnings were more than compensated for by net inflows of €5.7bn in other capital, mostly from inter-company loans. "The Eurozone narrowed its current account balance over the last 12 months thanks to services and income offsetting the lower surplus for goods. The positive factor is that capital continues to come in and fund the current account deficit in spite of the debt crisis," a Digital Look analyst said.