Euroland Reports a Third Trade Deficit in Four Months

August 18, 2008

Euroland posted seasonally adjusted trade deficits in four months during 1H08, including three of the last four.  A gap of EUR 3.0 billion in June was the largest deficit so far this year.  The unadjusted deficit swung from a surplus of EUR 8.7 billion in 1H07 to a deficit of EUR 12.6 billion.  The deterioration between 1H07 and 1H08 was mostly an energy story.  The energy deficit widened by EUR 35.5 billion in January – May from a year earlier, whereas the non-energy surplus improved by EUR 21.8 billion.  Toward midyear, however, other parts the trade balance were adversely impacted by softening global demand.  In the year to June, imports expanded 11.4%, whereas exports grew just 4.9%.  Euroland’s biggest trade surpluses in January-May were against Britain, the United States and Poland, and the largest deficits were generated by trade with China, Russia and Japan.  In those five months, Germany (EUR 83 billion) and the Netherlands (EUR 18.3 billion) ran sizable surpluses, while Spain (-EUR 41.6 billion), France (-EUR 25.6 billion) and Greece (-EUR 14.8 billion) had the greatest deficits. 

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