Eurozone’s trade surplus slips

The 19 countries that share the euro currency reported a lower than expected trade surplus in August as imports increased at a faster pace than exports.

Eurostat, the European Union's official data provider, reported that eurozone exports to the rest of the world increased 6.8% to €171.5bn in August, compared with the same month in 2016. Imports, meanwhile, rose 8.6% to €155.4bn.

As a result, the eurozone recorded a trade surplus of €16.1bn in August, down from the €23.2bn recorded in July and failing to match expectations of a rise to €23.3bn. The surplus in August 2016 was €17.5bn.

However, the seasonally adjusted trade surplus for the eurozone rose to €21.6bn from a revised €17.9bn in July.

Is the trend lower?

"Recent revisions reveal that net trade was a slight drag on GDP growth in the second quarter, after a jump in Q1, and we expect a repeat in the third quarter," said Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics.

"The trend in the Eurozone’s trade surplus is now falling slightly, principally due to a weaker surplus with the UK," he added.

Chart, courtesy of Pantheon Macroeconomics

"The chart shows that the euro area’s trade surplus has rebounded slightly in recent months, but it is down compared to the cyclical peak earlier last year, and we think the trend will roll over soon," Vistesen continued.

European Union

For the 28 countries within the European Union, export growth was eclipsed by the rise in imports to give a trade deficit of €5.1bn.