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Euro Zone May Trade Gap Wider Than Expected

Reuters
Friday, 18 Jul 2008 | 5:14 AM ET

The euro zone posted an unadjusted trade deficit much wider than expected in May as imports grew at more than double the rate of exports, data showed on Friday.

The external trade deficit of the 15 countries using the euro totalled 4.6 billion euros ($7.29 billion) in May, compared with surpluses of 2.5 billion euros in April and 1.4 billion a year earlier, the European Union's statistics office said.

Economists polled by Reuters had expected a 1 billion euro trade gap for May.

Eurostat said exports, in unadjusted terms, grew by 4 percent year-on-year in May while imports rose 9 percent.

In the first five months of the year, exports grew by 8 percent against the same period of 2007 while imports rose 11 percent.

Detailed data for May was not yet available, but a breakdown for the January-April period showed a 42 percent rise in the value of energy imports against the same period of last year had the biggest impact on the overall trade balance.

In January-April, the euro zone trade surplus with the United States fell to 17.4 billion euros from 20 billion a year earlier with exports down 3 percent and imports up 2 percent.

The euro strengthened some 12 percent against the dollar in the first four months of 2008.

The euro zone's trade gap with China narrowed marginally to 34.1 billion euros, while the trade deficit with oil and gas giant Russia widened to 13.7 billion from 11.2 billion.

Adjusted for seasonal swings, the trade deficit in May was 1.5 billion euros after a 1.4 billion surplus in April with a 3.4 percent month-on-month drop in exports and a 1.3 percent monthly fall in imports.

Contact Europe: Economy

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