MercoPress. South Atlantic News Agency

US current account deficit drops 6,5%

The U.S. current account deficit fell 6.5% to 208.7 billion US dollars in the first quarter of this year, the Commerce Department reported Friday. The figure equaled 6.4% of gross domestic product but this is tipped to rise next quarter as oil prices rise.

The improvement in the current account, the broadest measure of trade and investment flows, surprised analysts who had been expecting a drop of just one billion dollars, compared to 14 billion.

The U.S. current account deficit in the final quarter last year hit an all-time high of 223.1 billion dollars, according to the revised figures. The deficit in the final quarter was initially estimated at 224.9 billion dollars.

Even with the improvement, the deficit in the first quarter was still the second highest on record, putting the US again on track for another annual record. The current account deficit surged 19% in 2005 to 791.5 billion dollars from 665.3 billion dollars in 2004.

In the first quarter, the deficit in goods and services declined by 4 billion dollars to 190.7 billion.

Americans earned 1.9 billion dollars more on their overseas investments than foreigners earned on their U.S. holdings in the first quarter.

The figures come a day after Ben Bernanke, chairman of the Federal Reserve, said the impact of rising energy prices on general consumer prices had been limited to date.