MercoPress. South Atlantic News Agency

Oil imports push US current account deficit

Record oil import costs pushed United States current account deficit to 218.4 billion US dollars in the second quarter, equivalent to 6% of total US economic output, reported the US Department of Commerce.

The release comes just a few days before the scheduled meeting of the Federal Open Market Committee next Wednesday to decide on interest rates.

The second quarter deficit, a 2.4% increase on the previous period exceeded analysts' forecasts of 214 billion US dollars.

With world oil prices above 70 US dollars a barrel for much of 2006, the cost of buying oil pushed import values up 2% to 463.4 billion between April and June.

The deficit in goods expanded to 210.6 billion from 208 billion the previous quarter as a healthy rise in export values to 252.8 billion was offset by the oil-driven rise in imports.

Economists consider the huge US trade imbalance and its sizeable deficits with oil exporting countries and Asian nations such as China and Japan as one of the global economy's major problems.

The International Monetary Fund has repeatedly warned that a slowing US economy and growing world imbalances could hamper global growth next year. The current account deficit is the broadest measure of US global trade, including investment flows and trade in goods and services.