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Montevideo, March 28th 2024 - 22:07 UTC

 

 

Record US trade deficit

Friday, February 21st 2003 - 21:00 UTC
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The United Status trade deficit reached a record 435,2 billion US dollars in 2002, a 21,5% increase over the 358 billion of 2001, according to an official release from the Department of Commerce.

The figure called the "grand canyon of trade deficits" by Wall Street analysts follows a 25 billion US dollars drop in exports and a 52 billion surge in overseas purchases mainly from Germany, Japan and China. The previous highest deficit was 378 billion US dollars in 2000.

But not only a possible war with Iraq is causing concern about the strength of the US economy recovery: wholesale prices during January jumped an unexpected 1,6%, the biggest increase in 13 years.

However many analysts dismissed the wholesale inflation arguing they reflected a surge in energy prices and the end of car sales discounts.

Following on this line of thinking United States main corporations CEO meeting in Florida confirmed that there's little scope of increasing prices and "profits will have to come from cutting costs and improved productivity".

A major political battle is expected in the coming months when discussions on the Bush administration controversial 695 billion tax cut plan begin in the US Congress. The proposal has turned into a hot issue even among Economics Nobel Prize winners who are divided on the effects of the massive tax cut.

A week end meeting of G 7, Group of Seven Finance ministers to be held in Paris should render a perspective of the debate from the other side of the Atlantic.

Categories: Mercosur.

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