Balance of payments data today showed that the current account deficit for the first four months of the year was 4.82 billion euros, edging ahead of the 2020 cumulative total, for the first time this year, by 107 million euros.

Both exports and imports grew — not just with respect to last year, but also from their 2019 pre-pandemic levels. But the effect of import acceleration is weighing more heavily on the balance than the rise in exports.

Last month we looked at the trade data from the national accounts and concluded that supply bottlenecks were probably mostly responsible for driving the increase in imports by increasing the price of intermediate goods.

Eurostat hadn’t yet updated the import volume index for March, but now it has done, it seems that intuition was in large part sound. The total value of intermediate goods increased 35.4 percent from a year earlier, while the volume index rose about half that amount at 17.5 percent.

That increase in the intermediate goods volume index is still quite hefty though, and the data does suggest there’s something more going on than just input inflation. March’s unadjusted index reading is the highest in the data series, going back to 1999.

For April, we once again only have data for the total value of imports, which surged 62 percent from a year earlier.

Other data

The central government’s primary budget deficit for the first five months of the year was 8.17 billion euros, which was 998 million euros bigger than its target.
Labour Ministry data for May showed a positive employment balance, with 95,166 more people starting new jobs than leaving them.

Next week’s key data

Friday, June 25:

May deposits and bank lending (Bank of Greece)
January-May budget execution, final (Finance Ministry)

Elsewhere on the web

Nektaria Stamouli reports for Politico on how the restoration of the Acropolis is causing uproar.
Maria Demertzis and others at the Bruegel think tank argue that Europe should not neglect its capital union.
Former ECB executive board member Lorenzo Bini Smaghi responds to Wolfgang Schauble’s FT oped invoking Keynes.

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Grecology

Macro roundup: Input acceleration