WASHINGTON, March 24 (Reuters) – The U.S. current account deficit narrowed in the fourth quarter, but the deficit in 2021 was the largest on record amid rising imports as businesses rushed to replenish depleted inventory to meet high demand.
The Commerce Department said Thursday the current account deficit, which measures the flow of goods, services and investment in and out of the country, fell 0.9% to $217.9 billion in the latest quarter. . Economists polled by Reuters had forecast a deficit of $218.0 billion in the last quarter.
The current account gap was 3.6% of gross domestic product, down from 3.8% in the July-September quarter. The deficit peaked at 6.3% of GDP in the fourth quarter of 2005. The United States is now a net exporter of crude oil and fuel.
For 2021 as a whole, the current account deficit rose 33.4% to a record high of $821.6 billion. Last year, the deficit stood at 3.6% of GDP, the largest share since 2008 and up from 2.9% in 2020. The gaping current account gap in 2021 is not a problem for the United States. United given the dollar’s status as the world’s reserve currency.
The reduction in the current account deficit in the last quarter reflected a lower deficit in secondary incomes and an increase in surpluses in services and primary incomes.
Exports of goods and services to, and income received from, foreign residents rose $47.7 billion to $1.01 trillion in the fourth quarter. Imports of goods and services from foreign residents and income paid to them increased by $45.8 billion to $1.22 trillion. (Reporting by Lucia Mutikani Editing by Chizu Nomiyama)