Eurozone trade surplus triggered by weak imports as demand plummets

THE EUROZONE announced another large trade surplus for April yesterday, up to €14.9bn (£12.6bn) from €3.3bn at the same time in 2012, as imports remain weak.

The surplus fell slightly against March’s record figure of €22.5bn, but remained well above its average in previous years. Exports still outweighed imports by a distance, and the fall was only €2bn when adjusted for seasonal changes.

Data released confirmed that feeble demand for foreign goods is driving the change from 2012, when the euro area had only a modest surplus.

Every country in the currency union registered a decline in imports between January and March this year, against the figure from 12 months earlier.

While some countries saw only shallow declines, the embattled countries on the European periphery have seen demand evaporate rapidly.

Imports to Greece, Spain and Ireland fell by eight per cent each, while Portuguese and Italian imports dropped by seven per cent. Cyprus, which is still being hit by the effects of a financial crisis, saw a 16 per cent decline.

Imports from the UK to the EU fell by four per cent in the first quarter, dropping to €41.4bn and widening the UK’s trade deficit with the Eurozone.

There was moderate export growth in primary goods, with a rise of three per cent against the same period 12 months ago, driven by sales of energy and food. Manufacturing exports stayed largely static.

Dominique Barbet, analyst for BNP Paribas suggested that the Eurozone was still likely to suffer through 2013. “Foreign trade has been providing a cushion to amortise the recession, but the April data suggests continued recession in the second quarter,” he said.