US current account deficit hits record high in first quarter | Same Business

US current account deficit hits record high in first quarter

As firms restocked inventory to satisfy robust domestic demand, the US current account deficit increased to a record high in the first quarter.

The current account deficit, which gauges the movement of goods, services, and investments into and out of the country, surged 29.6% to an all-time high of US$291.4 billion last quarter, according to data released by the Commerce Department on Thursday (Jun 23). A deficit of US$273.5 billion was predicted by economists surveyed by Reuters.

Source

4.8% of the country's GDP was lost to the current account deficit (GDP). This share, which increased from 3.7% in the October-December quarter, was the highest since the third quarter of 2008. In the fourth quarter of 2005, the deficit reached its highest point at 6.3% of GDP.

America is currently a net exporter of fuel and crude oil. The United States is not concerned about the enormous gap because the dollar serves as the world's reserve currency.

The increase in goods imports, which reached a record high of US$829.7 billion, was driven largely by increases in capital goods, industrial supplies, and consumer products. Increasing by $13.9 billion to a record-high $487.4 billion, merchandise exports. Shipments of industrial supplies and commodities, mostly petroleum and goods, gave them a boost.

A record trade imbalance contributed to the first quarter's GDP decline, which was 1.5% annualised.

Payments of primary income climbed by US$10.7 billion to US$245.2 billion, while primary income collections increased by US$7.1 billion to US$278.6 billion. The increases were principally caused by an increase in portfolio investment income, particularly from interest on long-term debt securities and equities securities.

Source

Due to an increase in general government transfers, mostly income and wealth taxes, secondary income receipts increased by US$0.5 billion to US$43.6 billion. Payments of secondary income increased by US$4.7 billion to US$84.7 billion as a result of increases in both public transfers, which were mostly the result of international cooperation, and private transfers, which were primarily transfers connected to insurance. REUTERS

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