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Eurozone exports to Russia down 14 per cent in 2014
Exports and imports between the Eurozone and Russia have plummeted in the period January to May, figures from Eurostat revealed today.
There was a 14 per cent decline in exports from to Russia between January and June 2014 compared with the same period last year. Imports from Russia are also down seven per cent from €63.7bn to €59bn, meaning an overall trade deficit of -€26.9bn.
The ongoing crisis in Ukraine, triggered in February when Russian-supported separatists annexed the Crimea region, has led to a series of EU-imposed sanctions on Russia, which responded earlier this month by placing sanctions on agricultural imports from the region.
However, there was good news for the Eurozone this morning, as the overall trade surplus swelled to €16.8bn in June, up from €15.7bn in June 2013.
Despite the sanctions on Russia, overall exports were up three per cent to €162.2bn compared with figures of €157.6bn last year. Imports rose just two per cent, but they did enjoy a slight 0.5 per cent rise on figures from May 2014.
The data from Eurostat also revealed the UK's trade balance was suffering as a result of poor growth in the Eurozone area.
The UK’s -€48.1bn trade deficit was the largest across the EU, followed by France with a deficit of -€30.4bn, however that was largely down to an 11 per cent decline in intra-EU trading. Trading with countries outside the EU actually rose 1 per cent.
Christian Schulz, senior economist at Berenberg believes that while the geopolitical tensions in Ukraine are having an adverse affect on trade, demand should increase in the second half of the year.
He said:
We expect global demand to grow more strongly for the rest of the year. That should offset the probably worsening drag from Russia on Eurozone exports and should support overall GDP growth.However, in the short-term, the negative confidence impact of the crisis in Ukraine is likely to outweigh recovering global demand and may back the recovery for a little longer.