At €20 billion, Eurozone trade surplus raises to new record
EU exports outpaced imports to help widen the Eurozone trade surplus in November.
The EU’s trade in good balance widened in November, according to official figures from Eurostat. The Eurozone trade surplus was 20 billion euros in November 2014, that’s 3.5 billion higher than the same time a year ago.
It’s welcome news for the European economy, which has suffered at late from a slew of disappointing data, and will give the European Central Bank (ECB) hope for the recovery yet.
Exports beat imports
The data showed that exports to the rest of the world, unadjusted for seasonal swings, grew by one per cent, while imports fell around two per cent. When adjusted for seasonal effects, exports rose 0.2 per cent while imports were flat on the month. Nevertheless, the results exceeded expectations and helped lend strength to European stocks.
It seems that EU trade benefited from the crash in oil prices, driving down costs, while a weaker euro has helped boost demand for European goods. Recently the euro touched a nine-year low versus the US dollar, which should continue to boost demand.
Trade surplus widens despite Russian sanctions
The EU’s global trade has continued to show strength despite a collapse in trade with Russia, formerly a key trading partner of Europe.
Western-imposed sanctions were enacted in late July, following the Ukraine crisis, and experts were concerned about the effect it would have on EU trade. However, while the data for the first ten months of 2014 showed a 14 per cent fall in exports to Russia, lower oil prices have helped to offset the loss of trade.
Euro has scope to weaken further
The euro continues to come under pressure and will likely experience more, as the ECB is widely anticipated to launch a sovereign bond buying plan on Thursday.
Its programme aims to purchase government bonds with new money, which would greatly increase the supply of euros available and drive the price of the euro lower.