Euro Zone Reports Trade Surplus Despite Strong Euro
Euro zone trade remained in surplus in May and the April surplus was revised up, data showed on Wednesday, as exports continued to grow twice as fast as imports despite a strong euro.
The euro zone's seasonally unadjusted trade surplus fell to 1.7 billion euros ($2.35 billion) from a revised 2.3 billion in April, the European Union's statistics office said.
Exports grew by 7% year-on-year while imports rose 3% after an 11% export rise in April and a 6% increase in imports.
Rises in European Central Bank interest rates have strengthened the euro against the U.S. dollar and the Japanese yen, prompting complaints from the euro zone's second-biggest economy, France, that the exchange rate was hurting its exports.
On a trade weighted basis, in May the euro was at its strongest since the start of 2005, having appreciated 7.5% from early March 2006 to mid-May.
Economists have said, however, that an economic slowdown in the United States, the euro zone's second-biggest trading partner after Britain, was a more important factor than the exchange rate.
After months of steady appreciation, the euro has recorded new all-time highs against both the dollar and the yen this month.
Eurostat data showed that euro zone exports to the United States eased 1% in the January-April period and the trade surplus fell to 19.9 billion euros from 22.1 billion a year before.
With Japan, euro zone imports grew by 3% in the January-April period while exports rose only 1%. The trade deficit with Japan widened to 7.8 billion euros from 7.4 billion.
France, the most vocal critic of the euro's strength, saw its exports fall 1.2% on a seasonally adjusted basis in May, with imports rising 1.7%.
Economist have said French exports benefit less from fast global growth because they were focused more on consumers, while Germany, which produced more investment goods, fared better.
Germany was the biggest contributor to the overall euro zone surplus, with a 7.2 billion euro positive balance.