A ballooning energy deficit and slowing trade with the United States helped to push the euro zone into an unexpected trade deficit in June, adding to the gloomy outlook for the single currency area.
The external trade deficit of the 15 countries using the euro totaled 0.1 billion euros ($149.1 million) in June, the European Union’s statistics office Eurostat said in a statement.
This compared with a deficit of 3.9 billion in May and a surplus of 7.5 billion in June 2007, Eurostat said.
Economists polled by Reuters had expected a surplus of 1.2 billion euros in June.
“Unfortunately, the euro zone’s export performance is likely to deteriorate over the near term,” said Martin van Vliet, an economist with ING bank.
“Indeed, the adverse impact of past euro appreciation has not been fully felt and the U.S.-led slowdown in global demand appears to be deepening,” van Vliet said.
The figures effectively confirmed that the second-quarter contraction in euro zone economic growth was driven by weaker domestic demand rather than trade, he added.
Others said the recent weakening of the euro against the dollar may help reverse the trade trend going forward.
“The weakening of the euro in time will play an important role in providing stimulus for exports,” Sharratt said.
The May deficit was revised downwards from an initial figure of 4.6 billion euros.
The energy deficit in January to May was 124.5 billion euros compared with 89 billion in the same period last year.
The strong euro had helped cushion the euro zone from very high dollar-denominated oil prices. Oil prices, along with the euro, have also fallen from recent highs. (Reuters)