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Euro area trade surprlus narrows in April as exports drop

By Alexander Bueso

Date: Tuesday 18 Jun 2019

Euro area trade surprlus narrows in April as exports drop

(Sharecast News) - The euro area's surplus in trade with the rest of the world narrowed sharply in April on the back of a large drop in the single currency bloc's exports.
According to Eurostat, and in seasonally adjusted terms, the surplus narrowed by roughly 18% month-on-month to reach €15.3bn - a five-month low - as euro area exports fell by 2.4% to €192.6bn and imports declined by 0.8% to €177.3bn.

Versus a year ago, exports were up by roughly 2.6% and imports by 4.4%.

According to Christina Lacovides at Capital Economics, external demand would likely subtract from euro area gross domestic product in 2019.

She estimated that so-called net exports would subtract about half a percentage point from the annual rate of growth in GDP, telling clients that "all told, we think that the euro-zone economy will grow by just 0.8% in 2019".

In terms of quarterly rates of change and versus a year ago, exports to China had been rising since the start of 2019, reaching a 15-month high of 11.2% in April, possibly as Chinese corporates switched suppliers in the wake of the trade war with the US, Lacaovides said, although that was still well below the 22% high seen in 2017.

Exports to the US on the other hand were lower year-to-date, while those to the UK jumped by 12.9% -a seven-year high - but partly as British firms stockpiled goods, in a move that was likely to reverse.

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