MercoPress. South Atlantic News Agency

June trade figures confirm EU economy slowing down

The trade deficit of the 15-nation Euro zone shrank sharply in June to 101 million Euros, but failed to meet forecasts, according to data released Monday by Eurostat.

This compares favorably with May's 3.9 billion Euros deficit, but is far distant from the 7.5 billion surplus of June 2007 and 1.2 billion of May last year. Some analysts had forecast a 1.2 billion Euro surplus. A major factor adding to the deficit has been a rise in energy imports, with oil prices soaring in recent months. And demand from the US, the Euro zone's second largest market after Britain, has slipped as the dollar has weakened. Overall imports in June reached 135.6 billion Euros, while exports hit 135.5 billon which compared to May represent a seasonally adjusted export increase of 1.4% and imports by 2.9%. The Euro zone slowdown of the second quarter was confirmed by the fall in exports and lower domestic consumer spending. As to the EU-27 trade balance for June 2008, a deficit of 20.1 billion Euros was confirmed by Eurostat compared with 9.1 billion a year earlier; similarly with May 2008/2007 with 21.3 billion and 15 billion. In June 2008 compared with May 2008, seasonally adjusted exports rose by 0.5% and imports by 2.7%. The EU27 energy deficit increased to 148.6 billion Euros in January-May 2008 compared with 102.2 billion in January-May 2007, while the surplus for machinery and vehicles rose to 59.9 billion from 44 billion a year earlier. EU27 trade with most of its major partners grew, with the exception of exports to the US which contracted 4% in the January May period, compared to Jan-May 2007 and similarly with Japan, down 2%. The largest export increases were recorded with Russia 26%; Brazil 21%; China, 17%, and imports from Russia, 27% and Norway 25%. The EU27 trade surplus fell with the US from 26.9 billion in January-May 2008 compared with 30.5 billion in January-May 2007, while it increased with Switzerland to 8 billion from 6.1 billion. The EU27 trade deficit grew with Russia from 24.1 billion to 31.2 billion and Norway from 13.8 to 19.8 billion. However it decreased with China from 61.2 billion to 60.6 billion and with Japan to 14.6 billion from 15.2 billion a year ago. Concerning the total trade of EU 27 member states, the largest surplus was observed in Germany 83.3 billion Euros in January-May 2008, followed by the Netherlands 18.3 billion and Ireland, 10.7 billion. The United Kingdom posted the largest deficit 50.1 billion Euros followed by Spain 41.6 billion, France 25.6 billion and Greece, 14.8 billion.