Eurozone’s trade deficit narrows

Posted by admin on 19 August, 2008 under Business news | Be the First to Comment

The trade deficit of the 15-nation eurozone shrank sharply in June, but failed to meet forecasts, data shows.

The deficit fell to 101m euros ($149.1m; £79m) in June, from a deficit of 3.9bn euros in May.

While the deficit narrowed, it was far off the 7.5bn-euro surplus seen in June 2007, Eurostat said. Some analysts had forecast a 1.2bn-euro surplus.

A major factor adding to the deficit has been a rise in energy imports, with oil prices soaring in recent months.

And demand from the US – the eurozone’s second largest market after Britain – has slipped as the dollar has weakened.

The stronger euro makes goods such as German cars far more expensive for shoppers in the US.

Overall imports in June reached 135.6bn euros, while exports hit 135.5bn euros.

The latest figures come after the eurozone economies recorded their first contraction since 1999.

Between April and June, the area’s economy shrank by 0.2%, adding to concerns that a recession could be imminent.

The eurozone’s slowdown has stemmed from a fall in exports and lower consumer spending.

News reported by The BBC