Tokyo  - Japan's current account surplus shrank by 34.3 per cent in 2008 from a year before, the fastest fall on record, because slowing exports and import growth narrowed the trade surplus, the Finance Ministry said Monday.

The nation's current account surplus dropped for the first time in three years to 16.28 trillion yen (177.26 billion dollars) in 2008. It was the largest drop since 1986, when the comparable data became first available.

The surplus in goods and services trade plunged 81.7 per cent to 1.8 trillion yen in the reporting year compared to 2007.

In goods trade, the surplus shrank 67.3 per cent to 4.03 trillion yen with exports falling 3 per cent to 77.35 trillion yen and imports growing 8.8 per cent to a record 73.32 trillion yen.

The services trade logged a deficit of 2.24 trillion yen, down 10.4 per cent.

The income account, covering income from Japanese investment in foreign securities and payments by foreign employers in Japan, saw a 3-per-cent fall in its surplus to
15.83 trillion yen.

In December alone, the surplus in goods and services trade logged a deficit of 519.6 billion yen, the government said.

The goods trade surplus saw a deficit of 197.9 billion yen, with exports falling at the record fastest pace of 35.1 per cent to 4.59 trillion yen and imports shrinking 21.2 per cent to 4.79 trillion yen.

In services trade, the deficit expanded 3.8 per cent to 321.7 billion yen.

The income surplus fell 27.8 per cent to 724.2 billion yen.

The current account balance shows the gap between a country's income from foreign sources and foreign obligations payable, excluding net capital investment. (dpa)