The deficit of external accounts continues to grow. Cumulative current and capital accounts reached € 1,787 million in April, a significant increase over the € 27 million deficit recorded in the same month last year.
The data was released by the Bank of Portugal (BdP) on Tuesday, June 21st. “The Portuguese economy needs to raise € 1,787 million by April 2022,” the central bank emphasizes. Not only are the deficits higher than those recorded in April last year, but they are getting worse year-on-year with each passing month.
The current and capital account deficit in April was € 470 million, a reduction of € 40 million compared to the same period in 2021. This improvement is primarily due to an increase in the balance of € 909 million in the surplus. The increase in services and the decrease in the primary income deficit of € 212 million explain BdP.
Second, the central bank added that these effects were mitigated by a reduction in commodity balance deficits of € 975 million and a secondary income surplus of € 145 million.
Imports increase more than exports
The deficit of the financial account increased to € 1,975 million because imports exceeded exports (29% and 15.9%, respectively) and the value of exports and imports exceeded those recorded in April 2019. It reflects. Pandemic.
Service imports and exports increased by 108.1% and 61.3%, respectively, compared to April 2021, exceeding pre-pandemic values. “The increase associated with 2021 has contributed specifically to the areas of travel and tourism, air transportation and telecommunications, IT and information services,” BdP emphasizes.
Only travel and tourism imports and exports increased by 382.1% and 139.6% year-on-year, respectively, “the surplus of this item can increase by € 942 million,” the Bank of Portugal adds. Exports and imports exceeded April 2019 values by 13% and 7%, respectively.
The deficit in the primary income account decreased by € 212 million compared to April 2021 due to increased foreign dividends. Due to the decrease in European funds allocated to the ultimate beneficiaries, the surplus in the secondary income account decreased by € 145 million.
BdP explains that the capital account surplus has increased by € 38 million on the back of investment assistance.