Current account deficit narrows to €1.03bn in December

2010-02-15

The current account balance was negative in December and amounted to -€1.03bn, according to preliminary data from the National Bank of Poland (NBP). The market had anticipated a smaller deficit of about €920m.
Compared with the corresponding period of 2008, the current account deficit was down by over 40%. This was the consequence of a sharply lower deficit on the trade account, which shrank by more than half to €711m. On the other hand, the surpluses on the services and current transfers accounts both narrowed while the deficit on the income account increased compared with a year earlier, albeit by much less.
Cumulative data for the 12 months ending in December show a current account deficit of €4.97bn (approx. 1.6% of GDP), down by more than 70% over the corresponding period a year earlier. The substantial narrowing of the annual deficit was likewise thanks mainly to a dramatic reduction of the deficit on the trade account, as well as an increase in the surplus on the services account. At the same time, the deficit on the income account widened while the surplus on the current transfers account shrank over this period.
We expect the current account deficit to widen to about 2.4% of GDP in 2010.