US debt deepens as current account deficit surges to record

(AFP) – US debt to foreigners pushed into uncharted territory as the current account deficit widened in the first quarter to a record 195.1 billion dollars, the Commerce Department reported.

The report, representing the broadest measure of trade and capital flows, was bigger than the 190 billion dollars expected on Wall Street and represented 6.4 percent of US gross domestic product.[…]

Along with the US budget deficit, which hit 413 billion dollars in the past fiscal year, the “twin deficits” require foreigners to pump money into the United States at an unprecedented rate.[…]

“We expect further deterioration in the trade deficit in the quarters ahead,” said Marie-Pierre Ripert at IXIS Corporate and Investment Bank, who projected a 2005 gap of 760 billion dollars rising to 830 billion in 2006.

Full article at Yahoo! Business.