Tue Feb 19,
2013 6:53am EST
* Greek
2012 current account gap shrinks by more than
two-thirds
* Deficit at 2.9 percent of GDP, lowest
since euro adoption
* Drop reflects falling imports and debt
payments
* Greece
long term
By Harry Papachristou
narrowed
last year to its lowest level since the country joined
the euro,
adding to evidence that the economy is slowly
responding
to harsh austerity measures.
The gap narrowed by 73 percent in 2012 to
5.58 billion euros
($7.45
billion), helped by falling imports and lower interest
payments
after a sovereign debt cut, the country's central bank
said on
Tuesday.
The bank gave no breakdown on the extent to
which import
cuts
reflected less purchases of machinery by Greek firms, a bad
sign for
crumbling investment levels and chances of a much
needed
revival in exports such machines could produce.
However, one telltale statistic showed how
showy lifestyles
are out of
fashion in bailed-out Greece
sports car
was registered nationally in the whole of 2012. That,
plus one
used Ferrari sold, contrasted with 21 new and 37 used
ones in
2007, the last year before Greece
The current account deficit shrank to 2.9
percent of gross
domestic
product (GDP) in 2012 from 9.9 percent the previous
year - its
lowest level since at least 1999, according to
available
data.
"The pace of the adjustment was
impressive last year," said
Nikos
Magginas, an economist at the country's biggest lender
National
Bank.
The current account balance is a key
measure of how
competitive
a nation's economy is and of whether it is living
within its
means. The reading had deteriorated during a
debt-fuelled
economic boom to a record deficit of 14.7 percent
of GDP in
2008.
But a severe economic contraction, partly
due to austerity
measures as
part of the country's international bailout, has
narrowed
the gap and may eliminate it in 2014, according to
government
estimates.
In a further sign of economic adjustment
announced last
week,
consumer prices stopped rising in January for the first
time since
at least 1996, reflecting a plunge of almost a third
in
households' real disposable income.
Most of the improvement in the current
account reflected
falling
imports, as austerity-hurt businesses and households cut
down on
purchases of foreign machinery and consumer goods that
are not
produced at home. Imports dropped by 12 percent to 41.6
billion
euros, according to central bank figures.
Interest payments on Greece
after a 75
percent writedown Athens
bondholders
back in March. The income account balance, which
reflects
such payments, narrowed by 75 percent to 2.16 billion
euros.
falling by
4.6 percent to generate revenues of 10.02 billion
euros on
shrinking arrivals from Germany
tourism
market.
Exports rose by a mere 3.8 percent and the
country needed to
do better
than that to keep its payments balance broadly
balanced
when the economy recovers, economists warned.
"We need more exports of goods for the
correction in the
current
account deficit to become permanent," Magginas said.
Several in-built characteristics of the
Greek economy tend
to tilt it
towards current account deficits, such as high
dependence
on foreign energy sources and imported products which
cannot be
easily replaced with domestic ones.
The share of exports as part of the
country's GDP stands at
about 25
percent of GDP, the lowest level among the 17 countries
sharing the
euro.
euros at
the end of December, the Bank of Greece
************************************************************
KEY FIGURES (bln euros) 2012
2011
December -0.534
-2.143
November -0.850 -2.284
October -0.684 -1.469
September +0.775 -1.069
August +1.601 -0.103
July +0.642
-0.880
June -0.274 -1.598
Full-year -5.584 -20.634
-------------------------------------------
source: Bank of Greece
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