Euro area trade balance returned to surplus in February from a deficit in January as exports to countries outside the single-currency bloc continued to rise solidly, the latest figures from Eurostat revealed Monday.
The non-seasonally adjusted trade surplus was EUR 2.8 billion in February compared to a revised EUR 7.9 billion deficit in January. Economists had expected a surplus of EUR 3 billion. In February last year, the balance was in a deficit of EUR 2.8 billion.
Exports by euro area totaled EUR 150 billion in February, higher than EUR 138.6 billion in January. Imports rose modestly to EUR 147.2 billion from EUR 146.5 billion in January.
Annually, export growth remained stable at 11 percent, while import growth moderated to 7 percent from 4 percent.
Month-on-month, the exports rose a seasonally adjusted 2.4 percent in February, while imports increased 3.5 percent. The trade surplus fell to EUR 3.7 billion from a downwardly revised EUR 5.3 billion in January. Economists expected the surplus to fall to EUR 5.5 billion from the originally estimated EUR 5.9 billion in January.
The fourth successive rise in Eurozone exports in February boosts hopes that improving foreign demand will play a significant role in helping the single currency area return to growth over the coming months, and Eurozone exporters will be helped by the euro's current softer tone although this may lift their input costs, IHS Global Insight Chief Economist Howard Archer said.
"Despite the Eurozone's recent decent export performance in the first two months of 2012, it still seems highly likely that weak domestic demand in many countries meant that the single currency area suffered further GDP contraction in the first quarter, thereby moving into recession," the economist added.
The economy shrunk 0.3 percent in the fourth quarter of 2011, marking the first contraction since the second quarter of 2009. The European Commission expects the region to experience a mild recession, with the economy expected to contract 0.3 percent this year.
Eurostat also reported that the European Union's trade with the rest of the world resulted in a deficit of EUR 9.4 billion, compared with a deficit of EUR 10.5 billion in February last year. In January, the deficit was EUR 23.5 billion.
Among the EU members, the largest surplus was observed in Germany at EUR 13.1 billion in January. The U.K. registered the largest deficit, followed by France, Italy and Spain.
by RTT Staff Writer
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