The Republic's current account was in deficit by £683 million (#868 million) or 1.1 per cent of GNP last year compared with a surplus of £446 million in 1999.

The national accounts continued on a downward trend towards the end of last year, showing a deficit of £512 million in the balance of payments, slightly higher than the £446 million in the previous three months.

The deficit was the result of surpluses for merchandise and transfers being more than offset by deficits on services and income.

Merchandise exports did continue to increase - to £17.64 billion in the last three months of last year. At the same time, imports increased significantly to £11.44 billion. This resulted in exports of £62.8 billion in the full year and imports of £40.91 billion, compared with £49.58 billion and £31.7 billion respectively the previous year.

However, the services deficit continued to increase with royalties and business services imports offsetting computer and financial services exports. Profits accruing to foreign investors contributed strongly to the high income outflows.

According to Mr Alan McQuaid, chief economist at Bloxham Stockbrokers, the deficit is likely to widen further in 2001.