Latest news with #currentAccount
Economy ME
25-06-2025
- Business
- Economy ME
U.S. current account deficit hits record high as foreign direct investment plummets to $52.8 billion in Q1 2025
Foreign direct investment into the U.S. saw a remarkable downturn in the first quarter, falling to $52.8 billion from a downwardly adjusted $79.9 billion in the fourth quarter of 2024, as reported by the Commerce Department . This decline occurred amid heightened business uncertainty related to President Donald Trump's tariff proposals. This decrease may be temporary, as substantial foreign companies' manufacturing projects in the U.S. are set to commence, and Nippon Steel's nearly $15 billion acquisition of U.S. Steel will influence current and future quarters' statistics. The reduced first-quarter FDI inflows contributed to an expansion of the U.S. current account deficit, reaching a record high of $450.2 billion, as businesses accelerated imports in anticipation of Trump's significant tariffs. The Bureau of Economic Analysis within the Commerce Department also indicated that current account data for the fourth quarter was adjusted to reflect a gap of $312.0 billion, revised from the previously reported $303.9 billion. Current account overview The current account data tracks the net flow of goods, services, and investments into and out of the country. A substantial and persistent U.S. trade deficit has historically been mitigated by investment inflows into U.S. financial assets and foreign direct investment, which encompasses plant and equipment as well as corporate mergers and acquisitions. The first-quarter FDI inflows marked the lowest dollar amount since the $42.4 billion recorded in the fourth quarter of 2022, a time characterized by elevated post-pandemic inflation. Aside from this decline, quarterly FDI figures had remained above $61 billion since the easing of the COVID-19 pandemic, peaking at $135 billion in the third quarter of 2021, according to data from the Commerce Department. Read more: UAE emerges as global FDI hotspot, second only to the U.S. U.S. FDI leadership Historically, the U.S. remains the largest recipient of FDI globally, attracting investments across diverse sectors such as manufacturing, consumer products, technology, and finance. In 2023, new foreign direct investment expenditures in the U.S. totaled approximately $148.8 billion, though this was down 28 percent from 2022 levels. The decline partly reflects a global slowdown in FDI flows, with UNCTAD reporting a second consecutive year of global FDI decline in 2024, posing challenges especially for developing economies.
Reuters
24-06-2025
- Business
- Reuters
US first-quarter foreign direct investment falls sharply amid tariff uncertainty
WASHINGTON, June 24 (Reuters) - Foreign direct investment into the U.S. fell sharply in the first quarter to $52.8 billion from a downwardly revised $79.9 billion in the fourth quarter of 2024, the Commerce Department said on Tuesday, a drop that coincided with high business uncertainty over President Donald Trump's tariff plans. The fall could prove temporary, as billions of dollars worth of foreign firms' announced U.S. manufacturing projects get underway and Nippon Steel's nearly $15 billion acquisition of U.S. Steel adds to current and future quarters' data. The lower first-quarter FDI inflows contributed to a widening of the U.S. current account deficit to a record high of $450.2 billion as businesses front-loaded imports ahead of Trump's steep tariffs. The Commerce Department's Bureau of Economic Analysis also said current account data for the fourth quarter was revised to show the gap at $312.0 billion instead of $303.9 billion as previously reported. The current account data measures the net flow of goods, services and investments into and out of the country. A large and persistent U.S. trade deficit has traditionally been partly offset by investment inflows into U.S. financial assets and foreign direct investment, which includes plant and equipment, corporate mergers and acquisitions. The first-quarter FDI inflows were the lowest in dollar terms since the $42.4 billion recorded in the fourth quarter of 2022, a period coinciding with high post-pandemic inflation. Except for that drop, quarterly FDI since the easing of the COVID-19 pandemic had been recorded above $61 billion, with a peak of $135 billion in the third quarter of 2021, according to Commerce Department data. Economists have warned that extreme uncertainty over Trump's tariffs could paralyze investment decisions by companies and slow economic growth. Trump has argued that his tariffs are prompting an investment rush by companies seeking to bring manufacturing back to the U.S. to avoid tariffs. Paul Ashworth, chief North American economist at Capital Economics, said it was possible that uncertainty could be impacting some investment decisions but cautioned that quarterly FDI is inherently volatile, driven by specific transactions such as mergers, acquisitions and big projects. "It's probably noise, rather than signaling something more dramatic or serious about FDI coming into the U.S.," Ashworth said of the first-quarter data. He said he expected FDI to increase in future quarters as U.S. manufacturing investment projects announced by Japanese and other foreign automakers get started. South Korea's Hyundai Motor ( opens new tab and Hyundai Steel ( opens new tab in April announced $21 billion worth of new U.S. manufacturing investments alongside Trump in the White House. Nippon Steel's (5401.T), opens new tab hard-fought $14.9 billion acquisition of U.S. Steel closed last week and will show up in second-quarter inflows. "If anything, I'd expect FDI to be going up," Ashworth added.
Bloomberg
05-06-2025
- Business
- Bloomberg
South Africa's Current Account Deficit Narrows Slightly
South Africa's current-account deficit narrowed slightly in the first quarter, beating expectations for it to widen. The gap on the current account – the broadest measure of trade in goods and services – edged down to 35.6 billion rand ($2 billion) in the three months through March from a revised 39.3 billion rand in the previous period, data released Thursday by the central bank showed.
Reuters
05-06-2025
- Business
- Reuters
South African rand weaker before Q1 current account data
JOHANNESBURG, June 5 (Reuters) - The South African rand was weaker in early trade on Thursday, ahead of local first-quarter current account data. At 0551 GMT the rand traded at 17.8425 against the dollar , about 0.2% weaker than Wednesday's close. The South African Reserve Bank will publish the country's first-quarter current account data (ZACACT=ECI), opens new tab at 0900 GMT. Analysts polled by Reuters expect a deficit of 0.9%, wider than the 0.4% deficit reported in the previous quarter. Nedbank economists in a research note also forecast a wider shortfall, saying the first three months of 2025 likely recorded a smaller trade surplus as exports slowed slightly and imports increased. "The non-trade deficit probably also deteriorated as the rise in income receipts failed to offset the higher income payments," said the note. South Africa's benchmark 2035 government bond was marginally stronger in early deals, as the yield fell 0.9 basis points to 9.991%.
News.com.au
03-06-2025
- Business
- News.com.au
Further signs Australia's GDP is set to slump
An unexpected fall in Australia's current account balance has become the latest economic indicator to suggest a sluggish national economy. While the drag was modest, Australia's current account balance rose by $1.7bn for the first three months of 2025 to an overall deficit of $14.7bn. This was larger than a forecast estimate of $12.5bn. Oxford Economics Australia lead economist Ben Udy said Tuesday's current account balance released by the Australian Bureau of Statistics was just another sign of a slowing economy. 'The modest drag from net trade along with recent downbeat GDP particles paints a sombre picture for tomorrow's GDP reading,' he said. The decline in the current account balance was largely driven by a fall in the Australian dollar, as net primary income lifted in Q1. The trade balance changed little in the quarter, as a small improvement in the balance of goods was offset by a $0.2bn fall in the goods and services surplus. ABS head of international statistics Tom Lay said there was mixed news for commodities. 'Commodity price falls, notably coal, led to Australian mining businesses seeing lower profits flow to foreign direct investors, which reduced Australia's income outflows,' he said. But the price of gold rose sharply in the first three months, leading to exports of goods to lift by 2.9 per cent following a 2.3 per cent rise in the last quarter. This was the first consecutive growth in exports since the June 2022 quarter. The March rise was led by non-monetary gold, with more gold being exported and prices continuing to rise from previous highs in the December 2024 quarter. 'The $4.8bn rise in non-monetary gold exports was the highest on record. It was led by $11bn of non-monetary gold exports to the USA, which was larger than the total combined value of non-monetary gold exports to the USA over the past four years,' Mr Lay said. Without the gold contribution, goods exports would have fallen by 1 per cent in the March quarter. Separate business indicator data also released by the ABS painted a similar picture with company gross operating profits falling 0.5 per cent for the March quarter on the back of a weaker mining sector. Company gross operating profits also fell by 6 per cent. The current account balance also showed exports of services fell 1.7 per cent this quarter, with a 2.8 per cent fall in travel services. Education-related travel exports also declined in the March quarter. 'Cost-of-living pressures and global uncertainty still appear to be weighing on households' travel plans, with both exports and imports of travel services declining in the quarter,' Mr Udy said.
