Eurozone merchandise trade balance slipped into a deficit in January despite an acceleration in exports, data released by the statistical office Eurostat showed Friday.
The trade balance showed a deficit of EUR 7.6 billion in January, compared to a revised surplus of EUR 9.1 billion in December. Also, the gap was bigger than an expected shortfall of EUR 3 billion.
Nonetheless, the shortfall narrowed sharply from a deficit of EUR 16.1 billion logged during January 2011. At the same time, the seasonally adjusted trade revealed the surplus falling to EUR 5.9 billion from EUR 7.4 billion in December.
Exports increased for a third month in January. Shipments rose by a seasonally adjusted 1.3 percent month-on-month to EUR 152.3 billion in January, faster than the previous month's 0.9 percent growth.
Imports increased 2.4 percent on a monthly basis to EUR 146.4 billion during the month, recovering from the previous month's 0.4 percent decrease.
IHS Global Insight's European Economist Howard Archer said the third successive increase in exports boosts hopes that improving foreign demand will help the Eurozone return to growth sooner rather than later. Moreover, exporters will be helped by the euro's current softer tone although this may lift their input costs.
Eurozone gross domestic product suffered a 0.3 percent reduction in the fourth quarter. The European Commission expects the region to experience a mild recession, with the economy expected to contract 0.3 percent this year.
In the European Union, the trade deficit totaled EUR 23.8 billion in January, compared to the EUR 1.6 billion surplus registered in December. Seasonally adjusted exports and imports increased by 1.5 percent and 3.5 percent, respectively during the month.
In 2011, EU27 trade with all its major partners increased from the previous year, except for imports from South Korea.
Data showed that the deficit for energy for the EU27 increased notably to EUR 387.7 billion in 2011 from EUR 306.9 billion in 2010. Meanwhile, the surplus for manufactured goods increased.
Concerning the total trade of member states, the largest surplus was seen in Germany, which was followed by the Netherlands and Ireland. By contrast, the U.K. registered the largest deficit.
by RTT Staff Writer
For comments and feedback: firstname.lastname@example.org
What parts of the world are seeing the best (and worst) economic performances lately? Click here to check out our Econ Scorecard and find out! See up-to-the-moment rankings for the best and worst performers in GDP, unemployment rate, inflation and much more.